The British Prime Minister has said he intends to bring down taxes when inflation cools and claimed the economy was defying expectations, after experts said one in five people would be paying a higher rate of tax under his policies.
Rishi Sunak dismissed Nigel Farage’s declaration that “Brexit has failed” and said the nation’s finances were receiving boosts from the departure from the EU.
Brexiteers are pressuring the Prime Minister to seize on the ability to deregulate the economy, slash taxes and scrub laws written in Brussels from the statute book.
But he majorly downgraded the promised legislative “bonfire” before the Institute for Fiscal Studies projected that 7.8 million people would be paying income tax at 40 per cent or above by 2027-28.
Speaking to journalists travelling with him to a G7 summit in Japan, Mr Sunak said: “Right now, we’re grappling with high inflation and elevated borrowing and it is responsible to deal with that first.
“Once we have reduced inflation and brought borrowing under control, I would very much like to be able to reduce the tax burden.”
As millions suffer under a cost-of-living crisis, the Prime Minister expressed optimism about the economy after the Bank of England stopped forecasting that the UK would enter a recession this year.
Rishi Sunak through the years – in pictures
-
British Prime Minister Rishi Sunak announces July 4 as the date for the 2024 general election at No 10 Downing Street. Here, The National looks back at his political career. Getty Images -
Mr Sunak during local election campaigning in Teesside in May 2024. Getty Images -
Mr Sunak presents cupcakes to journalists on board a plane on the way to Warsaw in April 2024. Getty Images -
Mr Sunak during a press conference in Downing Street in January after the Safety of Rwanda Bill passed its third reading in the House of Commons. Getty Images -
Being applauded after his speech at the Conservative Party conference in October 2023. Getty Images -
Looking pensive alongside then-home secretary Suella Braverman at No 10 in October 2023. She didn't last much longer in the cabinet. Getty Images -
Mr Sunak sits in an old Special Branch police vehicle which was used to transport former prime minister Margaret Thatcher, in July 2023. Getty Images -
On board Border Agency cutter HMC Seeker during a visit to Dover in June 2023. Getty Images -
Mr Sunak alongside European Commission President Ursula von der Leyen, Canada's Prime Minister Justin Trudeau, US President Joe Biden, French President Emmanuel Macron and German Chancellor Olaf Scholz during the G7 Summit in May 2023. Getty Images -
Mr Sunak and his wife Akshata Murty arriving in Japan ahead of the G7 Summit in May 2023. Getty Images -
Mr Sunak and Chancellor Jeremy Hunt sending a message at Accrington Market Hall in January 2023. Getty Images -
Mr Sunak and Ukrainian President Volodymyr Zelenskyy meet in Ukraine's capital Kyiv in November 2022. Getty Images -
King Charles III welcomes Mr Sunak during an audience at Buckingham Palace, where he invited the newly elected leader of the Conservative Party to become Prime Minister and form a new government in October 2022. Getty Images -
Mr Sunak makes a statement outside No 10 in October 2022 after taking office. Getty Images -
Mr Sunak arrives inside Number 10 in October 2022. Photo: Simon Walker/ No 10 Downing Street -
Greeted by colleagues at Conservative Party HQ after having been announced winner of the leadership contest in October 2022. Getty Images -
Mr Sunak at Westminster Hall in London following the death of Queen Elizabeth II in September 2022. PA -
Mr Sunak visits his family's old business, Bassett Pharmacy, on the campaign trail in August 2022. Getty Images -
Mr Sunak looks at an NLAW anti-tank launcher during a visit to the Thales Defence System plant in Belfast in August 2022. Getty Images -
At a hustings event in Exeter in August 2022. Getty Images -
Celebrates England's first goal as he watches the Women's Euro 2022 final in Salisbury in July 2022. Getty Images -
Mr Sunak and Ms Truss take part in the BBC Leadership debate at Victoria Hall, Hanley, in July 2022. Getty Images -
With daughters Krisna and Anoushka and wife Akshata Murthy in July 2022. Getty Images -
Opening the Great Ayton Village Fete during the queen’s Platinum Jubilee celebrations in June 2022. Getty Images -
Mr Sunak and Ms Murthy speak to then-Prince Charles at a British Asian Trust event in February 2022. Getty Images -
Mr Sunak arrives at COP26 in Glasgow in November 2021 when he was chancellor. Getty Images -
Holding the budget box as he departs 11 Downing Street to deliver his Autumn Budget in October 2021. Getty Images -
At a press conference on the 2021 Budget in London in March 2021. Getty Images -
With former prime minister Boris Johnson during a visit to PD Ports on the River Tees in March 2021. Getty Images -
Mr Sunak poses with the budget box at 11 Downing Street in March 2021. Getty Images -
Meeting staff back at work after being furloughed at Hamleys toy shop in London, December 2020. Photo: HM Treasury -
Mr Sunak visits the Imperial Clinic Research Facility at Hammersmith Hospital, London, in November 2020. Getty Images -
Lighting a candle for Diwali on Downing Street, November 2020. Getty Images -
Working on a speech in his flat above 11 Downing Street in November 2020. Photo: HM Treasury -
Mr Johnson and Mr Sunak visit the headquarters of Octopus Energy in London in October 2020. Getty Images -
With his 'Winter Economy Plan' outside 11 Downing Street in September 2020. AFP -
Decorating a plate at Emma Bridgewater pottery in Stoke pottery in September 2020. Getty Images -
Promoting 'eat out to help out' on the Isle of Bute, Scotland, in August 2020. Getty Images -
A member of the public takes a selfie with Rishi Sunak during a visit to Scotland in August 2020. AFP -
Visiting a Wagamama restaurant in central London in July 2020. Photo: HM Treasury -
Rishi Sunak visits a Pret A Manger in Westminster in July 2020. HM Treasury -
With Mr Johnson at his first Cabinet meeting after a reshuffle at 10 Downing Street in February 2020. Getty Images -
Mr Sunak speaks during a general election debate in Cardiff in November 2019. Getty Images
“The IFS will make its own estimates. What I would say is, recently, we’ve seen massive upgrades in our growth forecasts from a range of different people, whether that’s the Bank of England and others including the IFS previously,” Mr Sunak said.
“You can see that in surveys from CFOs [chief financial officers] and other things – economic optimism is increasing, consumer confidence is increasing, growth estimates are being raised.”
He argued that the Office for National Statistics figures on disposable income are “hugely outperforming what people thought”.
“So I think there are lots of signs that things are moving in the right direction.”
UK Chancellor says 'best tax cut right now is a cut in inflation' – video
This week Mr Farage, the prominent Leave campaigner, said the country had “not actually benefited from Brexit economically”.
He blamed the Conservatives for mismanaging the economy, saying: “Brexit has failed.”
But Mr Sunak insisted he is “actually delivering the benefits of Brexit as opposed to just talking about it”.
The Prime Minister said he has commissioned freeports, cut VAT on sanitary products, reformed alcohol duties and was culling hundreds of EU-era laws.
“These are not small things and they come on top of all the other things. I feel pretty confident that we are delivering the benefits of Brexit from an economic perspective – the track record is very clear on that,” he said.
After a lengthy response, Mr Sunak said he was “glad to get that off my chest”.
