Austerity fears "unfounded" after tax-cutting autumn statement — Sunak

(Alliance News) - Rishi Sunak described as "simply unfounded" warnings that the Chancellor's ...

Alliance News 27 November, 2023 | 8:16AM
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(Alliance News) - Rishi Sunak described as "simply unfounded" warnings that the Chancellor's autumn statement will likely usher in a period of austerity for public services.

The UK prime minister rejected the warnings from economists that Jeremy Hunt's fiscal plans will result in painful and "implausible" savings for already-squeezed departments and public services beyond the next general election.

It comes after the Chancellor announced a national insurance cut worth GBP10 billion as well as savings for businesses in his autumn statement last week.

While it delighted Tory MPs who have long lobbied for tax cuts, economists and independent think tanks have said that the move came at the expense of funding for already squeezed public services.

Speaking to Bloomberg TV ahead of Monday's global investment summit, Sunak rebuffed a suggestion that he will be presiding over austerity as "simply not the case".

"Actually, government spending in the UK right now is at very high levels historically over this parliament.

"It's grown at very high levels, even in real terms, after the impact of inflation. So I think any commentary or accusations that that's what's happening is just simply unfounded.

"And we're at a point now, given how people are feeling, given the amount that's being spent, where I think the priority has got to be lowering the tax burden.

"Government's already spending a lot of people's money and what we need to see going forward is more productivity out of the public sector, needs to match what we've seen in the private sector post-Covid.

"And I'd rather focus on efficiency in the public sector and prioritise cutting people's taxes, rather than the government spending ever more of their money."

Despite the earnings bonus, millions of workers will face a squeeze on their finances with the tax burden still set to reach a record high.

The continuing freeze of personal tax thresholds will wipe out the benefit of the national insurance reductions for many workers, as higher earnings see millions pulled into paying more to the Exchequer through "fiscal drag".

By Dominic McGrath, PA Political Staff

Press Association: News

source: PA

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