Goal to bring taxes down again before next general election – Sunak

·4-min read
Chancellor of the Exchequer Rishi Sunak during the G20 summit in Rome, Italy. (Stefan Rousseau/PA) (PA Wire)
Chancellor of the Exchequer Rishi Sunak during the G20 summit in Rome, Italy. (Stefan Rousseau/PA) (PA Wire)

People’s quality of life can be boosted by higher taxes, the Chancellor has told MPs as he defended hiking the burden on Britons to a level not seen since the 1950s.

Appearing before the Commons Treasury Committee on Monday, Rishi Sunak insisted he will aim to bring the tax burden down by the next general election.

But he denied he was raising taxes now in order to cut them in order to win votes, and said rises also had to be seen in the context of the public services delivered.

Watch: What are the key takeaways from Rishi's budget?

Mr Sunak, who delivered his third Budget last week, said: “We can look at the taxes and, yes, people are paying more, they’re going to pay the new health and social care levy, no-one is pretending otherwise, that takes money from people, that’s why in an ideal world I would prefer not to have to put taxes up on people.

“But you do get something for that money.

“It’s all very well to just look at the taxes without looking at what you’re getting.

“So, you can talk about living standards by just looking at the tax side, I think that’s probably slightly unfair because people’s quality of life is also influenced by the quality of the public services that they get.”

Following Mr Sunak’s Budget on Wednesday, analysts said the tax burden on the country was at a level not seen since Clement Attlee’s Labour government in the 1950s.

The increases have caused dismay among many Conservative MPs at a time when rising prices have left many families facing a potential cost-of-living squeeze.

But Mr Sunak told MPs “the reason the tax burden is very high is because we’re spending a lot on lots of different things”.

Chancellor of the Exchequer Rishi Sunak laughs during a tour of the Bury Market in Lancashire, the day after presenting his budget to the House of Commons (Lindsay Parnaby/PA) (PA Wire)
Chancellor of the Exchequer Rishi Sunak laughs during a tour of the Bury Market in Lancashire, the day after presenting his budget to the House of Commons (Lindsay Parnaby/PA) (PA Wire)

After earlier telling MPs “the economy is very complicated”, Mr Sunak said: “Believe me, the last thing I would do is voluntarily raise taxes.

“We’ve had to do that to fund… we’ve done that to fund what we needed to do, right?

“It’s to fix the damage that coronavirus has done, it’s to make sure the NHS can get the resources it needs to recover from a pandemic where the backlog was going to stretch to unacceptable levels, and to fund what are landmark reforms of the social care system which other governments have not done.

“So, that’s why, those things, but it’s a once in a 300-year economic shock, it’s unsurprising that it’s had some consequences.”

And he pledged that he would aim to bring taxes down again.

He said: “That’s very much my goal, my mission, over the remainder of this Parliament, and we took a step in that direction at Budget.”

But after giving the example of the new tapering rules for Universal Credit, Labour MP Siobhain McDonagh interrupted to say: “That’s not a tax cut, that’s a benefit change.”

Labour MP Siobhain McDonagh (Lauren Hurley/PA) (PA Archive)
Labour MP Siobhain McDonagh (Lauren Hurley/PA) (PA Archive)

Mr Sunak said it was a “combined approach” but Ms McDonagh said: “That really isn’t a tax cut.

“You’re just desperate to find a tax cut.

“We’re sitting in the Margaret Thatcher room and you hope to emulate her.

“But the British Prime Minister and the British Tory government that you are most emulating at the moment is Ted Heath’s, low growth and therefore high tax.

“Is that not the case?”

Mr Sunak replied: “Actually, we’re forecast this year to grow at, well, historically very high rates as we recover from the pandemic.”

And he also insisted it was “reasonable and fair” to scrap the triple lock on state pensions.

The Chancellor pointed to winter fuel payments and free prescriptions as examples of help available for those of retirement age, and he said: “There’s lots of other support for pensioners separate to the state pension and, actually, pensions relative to earnings in this country are the highest they’ve been in over 30 years.”

He said that reducing the pension triple lock to a double lock for a year from 2022/23 was “a reasonable and fair thing to do in the circumstances”.

Post-Budget opinion polls showed that even after the Budget, the Tories held a five-point lead over Labour.

Sir Keir Starmer’s opposition slumped by two points from 37% to 35%, according to a survey by Opinium for the Observer, while the Conservatives went from 41% to 40%.

Watch: PM on Sunak's Budget: A fiscal meteorite we cannot ignore

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