Rishi Sunak has vowed to cut taxes before and after the general election – but has warned they will be funded by curbing benefits and government spending.
Speaking to The Sunday Telegraph, the prime minister sought to create a clear contrast between the Conservatives and Labour as campaigning begins.
While Mr Sunak insisted his priority is cutting taxes, he claimed that they would continue to rise if Sir Keir Starmer enters Downing Street.
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The PM’s pledge comes a day after Chancellor Jeremy Hunt said he was unsure whether the government could afford to slash taxes further.
During an interview in Nottinghamshire, Mr Sunak refused to be drawn on which taxes he intends to cut, with inheritance tax a particular cause for concern among many Tory MPs.
But at an event with local supporters and business leaders, he did hint that the VAT threshold of £85,000 would not be increased.
And indicating that national insurance and income tax may be at the top of his wishlist, Mr Sunak told the newspaper: “I believe in the nobility of work, I believe work is central to people’s lives. And I believe that a society where people are working hard should be one where their hard work is rewarded.”
The PM pointed to his recently announced cut to NI – which came into force yesterday – as evidence of the progress his government has made.
An estimated 27 million payroll employees will benefit from national insurance falling from 12% to 10%, and someone on the average UK salary of £35,000 will save £450 a year.
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“The autumn statement delivered the biggest set of tax cuts in one event since the 1980s,” Mr Sunak said. “That should give people a sense of the scale of what we’ve just done, and a sense of my ambition and the chancellor’s determination to cut taxes.”
Despite this, the tax burden is expected to rise to the highest level since the Second World War by the end of the decade – primarily because income tax thresholds have been frozen, dragging workers into higher rates when they receive pay rises.
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Mr Sunak warned further tax cuts will mean “difficult decisions” on public spending and controlling welfare, adding: “Lots of people will say to us ‘Oh gosh, you’re not going to spend enough here, there and everywhere.’
“I’m going to be crystal clear: my priority is cutting taxes, not more government spending. We need a more efficient public sector, not a bigger public sector.
“So that’s the plan. The only way to cut your taxes over time is to have a smaller, more efficient public sector.”
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Elsewhere in the interview, the prime minister claimed Labour “doesn’t care” about reducing the number of small boats crossing the Channel.
And he appeared to shrug off the possibility of Nigel Farage making a comeback to lead Reform UK, saying: “The choice at the next election, either I’m going to be prime minister at the end of it, or Keir Starmer is going to be prime minister at the end of it.”
Mr Sunak’s interview comes days after Sir Keir kickstarted his election campaign – and declared he will “fight fire with fire” if the Tories “go low” during the race.
Speaking to Sky News on Thursday, the Labour leader refused to commit to unfreezing tax thresholds if he gains the keys to Number 10.
However, he did pledge that any Tory reductions to inheritance tax would be reversed because “further tax cuts for those that are very wealthy” is not the right way forward.
Sir Keir Starmer will be interviewed live on Sunday Morning With Trevor Phillips from 8.30am on Sky News.