Less than 24 hours after Rishi Sunak promised a 1p cut in the basic rate of income tax during this parliament, commentators are casting doubt on whether he can and will keep his pledge.
Delivering his Spring Statement yesterday, the chancellor hailed the drop from 20p to 19p in the pound as a “tax cut for workers, for pensioners, for savers” and as a “£5bn tax cut for over 30 million people”. The cut was “fully costed and fully paid for in the plans announced today”, he added.
The only snag, said The Mirror, is that “Brits will have to wait until 2024” for the promised cut to kick in.
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‘Biggest surprise’
The BBC’s Laura Kuenssberg said that “given how dramatic the last couple of years have been, I wonder whether or not that promise will actually be able to stand the test of time”.
Sunak has already “given multiple economic statements that have been almost completely overtaken by events”, she noted, and “that may well happen again”.
Announcing a tax cut two years ahead is “highly unusual”, said The Independent’s Andrew Grice. But “it was clever politics”, because Labour will have to say ahead of the next election whether they would reverse the tax cut pledge.
The Tories, by contrast, “cannot afford not to deliver it”, Grice continued, “having already broken their 2019 manifesto pledge not to raise the rate of National Insurance”.
The “danger for Sunak” now, however, is that voters might not be “impressed by his taking tax with one hand next month and giving some of it back with the other in 2024”.
The tax cut pledge was the “biggest surprise” of the Spring Statement, wrote The Spectator’s political editor James Forsyth. For the government to pledge the cut in 2024 – when UK voters are due to go to the polls – and then fail to deliver would be “bizarre, and electorally disastrous”.
“Sunak has lashed himself – and the government – to the mast,” added Forsyth. He predicted that the Treasury will leverage the pledge over the next two years and argue that “this tax cut can only happen if spending is kept under control elsewhere”.
The Institute for Fiscal Studies has echoed the allegations that Sunak is “giving with one hand on tax, having previously taken away with the other”.
The head of the think tank, Paul Johnson, said the income tax cut and an increase in the National Insurance threshold would be funded by workers dragged into higher tax bands by the chancellor’s freeze on income tax thresholds and allowances. The changes would make the tax system “both less equitable and less efficient”, Johnson warned.
But the Daily Mail’s Alex Brummer argued that “we must assume there is method to the chancellor’s seeming madness”.
By “squeezing the pips of ordinary taxpayers and corporate Britain”, Sunak has left himself with “some £32bn of spare cash before the next election”, wrote Brummer.
Although the promised tax cut “seems like a lifetime away”, it gives Sunak a “handsome safety net should there be some new geopolitical or health crisis”. The cut “dangled before the Commons with such aplomb yesterday could be a down payment on something bigger as a general election nears”, Brummer added.
And the newspaper that he writes for has called for Sunak to go further.
While several of this morning’s front pages were critical of Sunak’s statement, the Daily Mail led on news that Tory MPs want more tax cuts, under the headline “Now slash taxes even further”.
