Rishi Sunak has hinted at business tax cuts to boost economic growth as he promised to reduce the tax burden 'carefully and sustainably'
ITV News Political Editor analyses how likely it is that personal tax cuts will also be announced
Tax cuts are being considered ahead of this week's autumn statement, the prime minister has said, amid speculation following a drop in the level of inflation.
Rishi Sunak, delivering a speech at a North London college, said it was now time to “start to responsibly cut taxes” after achieving his aim set out at the start of the year to halve inflation.
The PM would not be drawn on which taxes could be cut on Wednesday but said the chancellor focus is “very much the supply side” of the economy - suggesting there could be business relief.
But ITV News Political Editor Robert Peston believes personal tax cuts are more likely.
Mr Sunak said: “I’m not going to pre-empt the decisions that the chancellor will make, other than to say that we will approach that task seriously and responsibly.
“We can’t do everything at once, as I said. We will prioritise, we will be disciplined and our focus is very much the supply side and growing the economy."
ITV News Political Editor Robert Peston said on X, formerly Twitter, that the chancellor "will DEFINITELY cut personal income taxes on Wednesday, income tax or national insurance".
"If he doesn’t the PM will look incredibly foolish for saying this morning, repeatedly, that the moment has come to start cutting taxes," he added.
Peston said he expects personal tax cuts because the PM "knows most voters don’t see the extension of capital allowances for business (though important and expensive) as tax cuts that matter to them".
Mr Sunak has repeatedly resisted pressure from his own backbenchers who have been demanding tax cuts, insisting they would be irresponsible to cut taxes while the economy is failing to grow.
But, with a need to win back right-wing support in his party after sacking former home secretary Suella Braverman, tax cuts are looking more likely.
“I promised you we would have inflation. We took the difficult decisions and we have delivered on that promise," the PM said, "so now you can trust me when I say that we can start to responsibly cut taxes".
In other comments which will chime with the ring-wing of his party, Mr Sunak said he also wants to tackle benefits cheats.
He said it was a “national scandal” that around two million working-age people were not in employment.
“We believe in the inherent dignity of a good job, and we believe that work, not welfare is the best route out of poverty,” he said.
“Yet right now around two million people of working age are not working at all. That is a national scandal, an enormous waste of human potential.
“So we must do more to support those who can work to do so, and we will clamp down on welfare fraudsters because the system must be fair for taxpayers who fund it.”
Summarising his plan, he said: “Work for those who can, a generous safety net for those who can’t and tougher penalties for fraudsters.
“That is what a compassionate Conservative welfare system looks like.”
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