The last few years have not been easy for the British economy. We have faced the legacy of Covid, war in Ukraine and the Middle East. These challenges have made life tough for people in Britain.
Since the beginning of 2023, we have been working on five priorities. Three of them are economic. To halve inflation, grow the economy and reduce debt.
We have made good progress. Inflation has fallen from 11.1 per cent to 4.0 per cent, the economy has performed better than forecast, wages are rising, mortgage rates are starting to come down, the economy has outperformed European neighbours and debt is on track to fall as a share of the economy.
The job is not done. But because of the progress we have made, the economy is turning a corner and we have been able to afford tax cuts as part of our plan to reward work and grow the economy.
Today’s budget shows we are sticking to the plan. The Budget will cut taxes for 27 million working people from April, by again cutting the main rate of employee National Insurance Contributions (NICs) from ten per cent to eight per cent. Combined with the cut at the Autumn Statement, that is a tax cut of over £900 for the average worker earning £35,400 – giving the average earner the lowest effective personal tax rate since 1975.
It will also cut taxes for two million of the self-employed, by cutting the main rate of Class 4 NICs from nine per cent to six per cent. Combined with the tax cuts for the self-employed at the Autumn Statement, this is a tax cut of around £650 for an average self-employed person earning £28,000 a year.
Going further still, this Budget will freeze alcohol duty, alleviating pressure on the hospitality sector, and will maintain the five pence cut to fuel duty and freeze rates for the fourteenth consecutive year, helping keep motoring costs down – a £3.1 billion tax cut for drivers.
The choice is clear – stick with the plan that is working under Rishi Sunak and the Conservatives which will deliver a brighter future for the country or go back to square one with Keir Starmer and Labour, who can’t say what they’d do, because they don’t have a plan.