Parties clash

Chancellor to test Labour with plan for tax cuts

Jeremy Hunt (Treasury)
Jeremy Hunt: planning tax cuts

Chancellor Jeremy Hunt will today cross swords with Labour over who has the most affordable tax policies.

Mr Hunt will promise tax cuts and abolition of national insurance, while accusing the Labour Party of not being honest about how it will fund its spending pledges.

Labour has hit back by saying Mr Hunt is pledging £46 billion of unfunded cuts that bear a similarity to Liz Truss’s disastrous mini-budget.

The chancellor has described national insurance as a “tax on work” and said he believed it was “unfair that we tax work twice” when other forms of income are only taxed once.

In his speech today, Mr Hunt will say that Labour “thinks people don’t know why taxes had to rise”.

He will say that the furlough scheme, the energy price guarantee and billions of pounds of cost-of-living support were policies that Labour supported, “which is why it is playground politics to use those tax rises to distract debate from the biggest divide in British politics – which is what happens next.

“Conservatives recognise that whilst those tax rises may have been necessary, they should not be permanent. Labour do not.”

This morning Labour will release a new ‘government policy costing document’ on the Conservative Party’s plan to abolish national insurance warning it could lead to “higher borrowing, higher taxes on pensioners or the end of the state pension as we know it”.

James Murray, Labour’s shadow financial secretary to the Treasury, said: “There is nothing Jeremy Hunt can say or do to hide that fact that working people are worse off after 14 years of economic failure under the Conservatives.

“The tax burden is at a 70-year high and the average household is forecast to be £870 worse off under Rishi Sunak’s tax plan.

“Now Jeremy Hunt is desperately trying to distract from reality with his reckless £46 billion unfunded tax plan to abolish national insurance.”

Next week will see the publication of data that the Chancellor hopes will show inflation falling below the Bank of England’s 2% target.

He sees this as a key moment for the economy. The Tories are trailing Labour by 20 percentage points in opinion polls and have worse ratings on the economy than Sir Keir Starmer’s party.

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