We must get serious about our public finances; the United Kingdom has lived beyond its means for far too long. The Government’s response to our economic circumstances has shown that it is willing to make unpopular decisions in order to bring our public finances under control.
The Government Actuary’s Department has stated that the UK risks defaulting on its age-related spending commitments in just twenty years. This is a deeply troubling situation and one that requires great fiscal restraint as the Prime Minister has shown.
In January 2023, the Prime Minister set out five priorities for government. Three were economic: to halve inflation; grow the economy; and reduce debt. Since then, inflation has more than halved, the economy has recovered more quickly from the pandemic than first thought, and debt is on track to fall.
Thanks to the stability this has brought, the Government is now able to focus on the long-term decisions required to strengthen our economy: reducing debt; cutting tax and rewarding hard work; building domestic, sustainable energy; backing British businesses; and delivering world-class education.
As a low-tax Conservative, I believe people in Wycombe and across the UK should keep more of their hard-earned money and that they know best how to spend it.
I welcome that the Autumn Statement 2023 set out the biggest package of tax cuts to be implemented at a fiscal event since the 1980s, while at the same time getting inflation falling and borrowing lower. At the time, I wrote a blog post detailing all of the most impactful announcements made.
In the statement, The Chancellor announced that taxes would be cut for 27 million working people by reducing the main rate of National Insurance contributions from 12 to 10 per cent. For the average worker earning £35,000 a year, this means a tax cut of £450. I also welcome that the Government will boost the National Living Wage (NLW) by 9.8 per cent to record levels of £11.44 an hour. A full-time worker on the NLW will see their pay increase by over £1,800.
Additionally, the Government announced in the Autumn Statement that it is cutting business taxes by £11 billion – the biggest business tax cut in modern British history – by permanently enabling businesses to offset investments against their tax bills. For every pound a business invests, its taxes are cut by up to 25p. Companies can now permanently claim 100 per cent capital allowances on qualifying main rate plant and machinery investments. This will generate £3 billion of additional investment each year and £14 billion over five years.
The Government is also freezing the business rates multiplier for small businesses for a fourth consecutive year, saving an average shop £1,650. It is also extending the Retail, Hospitality and Leisure relief, meaning 230,000 properties will benefit from almost £2.4 billion in support, protecting small businesses in our high streets and town centres.
As a low-tax conservative, I welcome these tax cuts, but there is certainly more to do in these areas. I know that the Government wants to cut taxes further, and I hope that the responsible steps the Government has taken with our economy will allow us to do so.
