Sunak proposes welfare reform to fund pre-election tax cuts on ‘fairness’

Chancellor Rishi Sunak said the tax cuts, funded by cuts to the benefits budget through reforms, would create “fairness”.

The Conservative Party leader said Britain’s welfare system was “not working” and said the number of people leaving work due to illness had tripled in the past decade.

He suggested the UK government would bring in reforms that would mean “everyone who can work will work”.

This comes after he told the Sunday Telegraph that he “wanted to continue cutting taxes” but to do so “we need to make difficult decisions to control welfare”.

This has raised expectations that the Conservative leader may seek leeway to propose tax cuts ahead of the election by cutting public spending or reforming the way welfare support is financed. .

Labor leader Sir Keir Starmer accused the Prime Minister of trying to draw “red lines” with his comments ahead of voters going to the polls later this year to elect a new Westminster government. .

Former UK Victims Commissioner Baroness Casey said: “Many people in the UK will not feel these tax cuts” and suggested the Prime Minister was “selling nonsense”.

“If they’re going to crack down on welfare, why haven’t they done it before? And as far as I can see, it’s not working,” she told the BBC’s Sunday With Laura Kuenssberg program. .

“And the idea that all of these people are ripping off benefits, even though most of these people are working, the vast majority of people on benefits are working.”

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In an interview with Kuenssberg, Sunak said he was trying to control public spending “in general,” not just the welfare budget.

“It’s about discipline on public welfare. It’s about discipline on public sector pay,” he said.

The Prime Minister said he was concerned about the “significant increase in the number of people deemed unfit to work” in recent years.

“In the last 10 years, the system has not been reformed at all and we are seeing the number of people approved triple,” Mr Sunak said.

“Do you think our country is three times sicker today than it was 10 years ago? The answer is no.

“This system is not working as it was designed to work and we are currently moving forward with reforms that will mean looking at who qualifies as an approved disease.

“It will not affect everyone on existing benefits. Over time, it will also affect people who are new to the welfare system.”

The prime minister insisted that benefit reform is about “fairness” and “ensuring that everyone who can work can work.”

“And for everyone who is working hard, we reward that effort with tax cuts. I think this is a conservative approach and the right approach for our country,” he added.

The comments came on Saturday after the introduction of the 2p National Insurance tax cut, the first tax cut announced in the Autumn Statement in November.

The main insurance premium rate for National Health Insurance has been reduced by 2 percentage points from 12% to 10%.

Prime Minister Jeremy Hunt said the pre-election cuts would mean households with two earners could earn nearly £1,000 better a year.

But Labor said the tax threshold, a fiscal policy first introduced by Mr Sunak when Mr Hunt was chancellor during the coronavirus pandemic, remained frozen, which it said amounted to a “raw deal”.

Freezing the threshold would effectively increase taxes on millions of people whose wages would rise in line with inflation, while keeping the tax amount fixed.

Sir Keir said the Prime Minister’s talk of pre-election giveaways was being done “in his own interests” and was “the wrong way to govern”.

The opposition leader told Sky News on Sunday: “He ran out of ideas.

“They are desperately struggling and trying to find a dividing line in the run-up to the election.

“This is not part of an economic growth strategy, the Chancellor is simply opting for a tax cut that he believes could be the difference maker in the run-up to the election.

“That’s the wrong way to govern.

“It doesn’t matter what party you belong to, whether you’re Conservative or Labor, you just go down the path of desperately picking the divisive ones without a strategy for the country. is the hallmark of this era.” It’s been wrong for the past 14 years. ”

Labor is poised to push back against any suggestion that taxes could rise under Sir Keir’s government.

The party leader said in September that he would not raise income tax if he secured the keys to 10 Downing Street, and shadow chancellor Rachel Reeves this week appeared to reject the idea of ​​increasing national insurance.

Sir Keir said the tax burden on working people was too high, but declined to say what kind of taxes he would like to see cut, instead stressing the need for economic growth.