Speculations ahead of autumn statement on Wednesday about potential personal tax cuts
Here is a round-up of what the papers are saying about the autumn statement.
Steven Swinford in the Times says Jeremy Hunt is expected to cut national insurance and business taxes. Swinford says:
One government source said a cut in income tax was less likely than a cut in national insurance. There are concerns over the cost, £13 billion for a 2p cut, and because it would probably increase inflation as people had more money to spend. They suggested that Hunt was more likely to cut national insurance, particularly for self-employed workers, in an attempt to stimulate growth, because it would probably be cheaper and less inflationary.
The chancellor has been considering cutting inheritance tax and has assessed options including halving the rate from 40 per cent to 20 per cent. However, the issue became increasingly controversial after Labour attacked it as a tax cut for the wealthy during a cost of living crisis and some Tory MPs grew concerned. Inheritance tax cuts appear increasingly likely to be left until the budget in the spring.
But George Parker in the Financial Times says Tory MPs are hoping Hunt will announce a cut in the basic rate of income tax. Parker says:
The chancellor has shelved plans to cut inheritance tax until next year, raising Tories’ hopes that he could instead honour Prime Minister Rishi Sunak’s promise to start cutting the 20p basic rate of income tax.
Sunak said last year that he wanted to lower the rate to 16 per cent by the end of the next parliament. A 1p cut from next April would be seen by MPs as a downpayment on that pledge. It would cost about £6bn, according to HMRC estimates.
And David Churchill in the Daily Mail says much the same. Churchill says:
Treasury officials have been examining how feasible a 1p or 2p cut would be ahead of Wednesday’s statement. They have ruled out relaxing the frozen thresholds around the levies.
Cutting income tax by 2p in the pound would cost £13 billion to £14 billion a year and save UK households around £450 annually on average. It would also give the Tories a much-needed boost ahead of the election, expected to be in autumn next year, as it trails Labour by 20-plus points in the polls.
We’ve had the net zero relaunch, the party conference relaunch, the King’s Speech relaunch and the reshuffle relaunch, none of which has made a difference to the polls. We now need the autumn statement relaunch which will actually connect with voters.Continue reading...