Rishi Sunak talks to reporters on his way to the G7 summit in Japan Photo: Stéphane Russo/AP
Rishi Sunak gives hope for tax cuts ahead of the next election as he argued that the economy is recovering much faster than expected.
The PM dismissed predictions from a leading economic think tank that the tax burden is unlikely to return to previous Covid levels for decades , — stating that the country «greatly outperforms» the gloomy forecasts of experts.
He said that the priority at the moment is to reduce inflation.
But he added that he was a «low-tax Conservative» and that he wanted to «lower taxes for the people.»
Mr Sunak's comments came after Sir Jake Berry, the bench's senior advocate, urged him and the chancellor to restore their tori mojo and cut taxes.
On Wednesday, the Institute for Financial Studies (IFS) said Jeremy Hunt plans to have one in five workers pay higher income taxes by 2027 .
This is because the chancellor froze the threshold at which people start paying this tax.< /p> Tax burden
Responding to a question about this forecast, Mr. Sunak said: “I am a supporter of low taxes. I want to lower taxes for the people.
“I want people's hard work to be rewarded, so I really want to be able to lower taxes for the people.
“Now we are fighting high inflation and increased borrowing, and it is important and responsible to deal with this in the first place.
“Once we bring inflation down and borrowing under control, I would very much like to be able to lower the tax burden.”
The Internal Revenue Service also warned that the tax burden is unlikely to return to 2020 levels for many years to come. years.
Paul Johnson, its director, said: «My bet is that the tax burden will not return to pre-2020 levels for many decades, if ever.»
He referred to the fact that politicians are practically unable to implement the spending cuts necessary to reduce taxes.
When asked if he considered this forecast for the tax burden too pessimistic, he replied that he thought so .
“IFS will make its own assessments,” he said. “What I would like to say is that we have recently seen a significant increase in our growth forecasts from a number of people, including the Bank of England and others, including the IMF [International Monetary Fund] earlier.
«You can see in the CFO surveys and other things, economic optimism is on the rise, consumer confidence is on the rise.»
He added that recent data from the Office for National Statistics on real household disposable income «well outperforms» the pessimistic forecasts.
«There are many signs that things are going in the right direction,» he added.
«Taxes are too high.»
Sir Jake said it was «completely wrong» to force ordinary workers pay higher rates.
He said: “By 2027, one in four of our teachers will be paying this 40 percent tax that was introduced for the wealthiest segments of society while teaching the next generation.
“One in eight of our nurses will have more than high rate taxpayer. It seems to me that such a policy will not last until 2027.
“It is completely wrong when ordinary workers are pulled into the 40 percent tax bracket, and this is a sign that the government will have to change it.
< p>“The truth is, look at the local election results. . Taxes are too high and you can't be a low tax party if you're really a high tax government.
“The people who voted Conservative in 2019 wanted a conservative government to pursue conservative policies. , and first of all this includes saving more of your own money.
“And I hope and believe that as we go through this very difficult period, Jeremy Hunt and the Prime Minister will find their conservative charm again and start cutting taxes for ordinary working people, because I just think that what we are now we are unstable.
UK tax burden comparison
The PM also dismissed Nigel Farage's suggestion that Brexit had so far failed.
Mr Sunak said: «I voted for Brexit, I believe in Brexit. As chancellor and prime minister, I'm actually talking about the benefits of Brexit, not talking about it.
“As Chancellor, I introduced free ports, a Brexit benefit across the country, attracting jobs and investment to many different places.
“We have lowered VAT on hygiene products, reformed duties on alcohol, which means that this summer it will be possible to buy beer cheaper in pubs.
“These are all very tangible benefits of Brexit, which I already held as chancellor.»
He also said that by the end of the year the government would «change and repeal about 2,000 different pieces of retained EU legislation.»
He said his approach to overhauling them all, and reforming and abolishing those with «the biggest impact on the economy» was the right thing to do.
He added: «Regarding the economy as a whole, PwC conducted a survey of 4,000 CEOs conducted months ago from over 100 different countries. Which country did they name as their number one European investment destination? It was the UK. Globally second only to the United States and China.
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