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Prime Minister Rishi Sunak has said the government is now able to cut taxes, after the pace of price rises eased.<\/b><\/p>\n<\/div>\n<\/div>\n\n
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Mr Sunak said his target of halving inflation had been met so taxes would be reduced in “a responsible way”. <\/p>\n<\/div>\n<\/div>\n
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He refused to comment on “speculation” about changes to individual taxes and said there would be more details in Wednesday’s Autumn Statement. <\/p>\n<\/div>\n<\/div>\n
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But the PM said the government could now move to “the next phase” of its plan to grow the economy. <\/p>\n<\/div>\n<\/div>\n
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Last week the government said it had met its pledge to halve inflation – the rate prices are rising – after the figure fell sharply to 4.6% in October. <\/p>\n<\/div>\n<\/div>\n
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The decrease was largely due to lower global energy prices, so there is a limit to how much credit ministers can take. <\/p>\n<\/div>\n<\/div>\n
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However, Mr Sunak said the government had taken “difficult decisions”, including avoiding inflationary pay rises in response to strikes, to deliver on its pledge. <\/p>\n<\/div>\n<\/div>\n
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“That’s why we can now can move on to the next phase of our economic plan and turn our attention to cutting taxes,” he said. <\/p>\n<\/div>\n<\/div>\n
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“We will do so seriously, we will do so responsibly, but that time is now here.”<\/p>\n<\/div>\n<\/div>\n
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\n- Chris Mason: Tax cuts look likely – the question is where?<\/li>\n
- What is the Autumn Statement and when is it?<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n
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Tax levels in the UK are at their highest since records began 70 years ago, according to the Institute for Fiscal Studies think tank.<\/p>\n<\/div>\n<\/div>\n
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With the Conservatives trailing in the polls, the government has been under pressure from many of its own MPs to cut taxes ahead of a general election, which is expected next year. <\/p>\n<\/div>\n<\/div>\n
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In a speech at a London college, Mr Sunak acknowledged “we can’t do everything all at once”. <\/p>\n<\/div>\n<\/div>\n
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“It will take discipline and we need to prioritise,” he said. “But over time, we can and we will cut taxes.”<\/p>\n<\/div>\n<\/div>\n
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His comments all but confirmed tax cuts are coming in Wednesday’s Autumn Statement, when the chancellor sets out the government’s tax and spending plans for the year ahead. <\/p>\n<\/div>\n<\/div>\n
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The prime minister would not confirm where exactly tax cuts would be made. <\/p>\n<\/div>\n<\/div>\n
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Welfare changes<\/span><\/h2>\n<\/div>\n\n
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However, Mr Sunak said he wanted to focus on “rewarding hard work”, which would suggest national insurance as the likeliest candidate. <\/p>\n<\/div>\n<\/div>\n
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He also stressed the need to avoid doing anything which could fuel inflation. <\/p>\n<\/div>\n<\/div>\n
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In a reference to his predecessor Liz Truss, who beat him in the Conservative leadership election in the summer of 2022, he pledged not to make “the same economic mistake as last year’s mini-budget” and warned against “unfunded tax cuts”. <\/p>\n<\/div>\n<\/div>\n
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On benefits, he said he wanted to “reform” the welfare system so “work always pays”. <\/p>\n<\/div>\n<\/div>\n
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This could mean increasing benefit payments by October’s inflation figure of 4.6%, rather than September’s higher figure of 6.7% as is convention.<\/p>\n<\/div>\n<\/div>\n
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Mr Sunak said he would not “pre-empt” any announcements on Wednesday, but added that the welfare system should be “compassionate, fair and sustainable”. <\/p>\n<\/div>\n<\/div>\n
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In his speech, the prime minister promised to do more to help people into work, as well as to “clamp down on welfare fraudsters”. <\/p>\n<\/div>\n<\/div>\n
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The government has already announced that claimants who are deemed fit to work and refuse to seek employment would lose access to their benefits for a period. <\/p>\n<\/div>\n<\/div>\n
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While Chancellor Jeremy Hunt had considered cutting inheritance tax, sources said the focus of the Autumn Statement would be to promote growth – on which inheritance tax has minimal impact. Mr Hunt is likely to return to the issue for his Budget in the spring.<\/p>\n<\/div>\n<\/div>\n
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There is also expected to be a focus on business taxes as cutting them is seen as key to helping the economy to grow. <\/p>\n<\/div>\n<\/div>\n
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On support for businesses, the prime minister said he wanted to help companies to “invest, innovate and grow through lower taxes and simpler regulation”. <\/p>\n<\/div>\n<\/div>\n