Sunak’s £330 tax cut claim – Channel 4 News

Rishi Sunak has been defending his economic plans as the race to become the next Conservative leader and prime minister reaches its final weeks.

Challenged by LBC’s Andrew Marr on his resistance to new tax cuts in the short term, the former chancellor was keen to point to his record in government.

“Just this month, we’ve already delivered a tax cut: we’ve raised the amount that people can earn without paying a penny of income tax or national insurance. I did that. It’s making a difference in people’s pay checks, everyone listening, this month. It’s worth about £330 a year.”

But there’s more to this claim than meets the eye.

The policy he’s talking about is raising the threshold at which people start paying national insurance, which Mr Sunak announced in this year’s Spring Statement.

But as Treasury documents from the time make clear, that £330 a year figure refers to the “typical worker” – not all workers. For those who are self-employed, the change is worth rather less: £250 a year, according to the same Treasury publication. And it does nothing for those who were already earning below the national insurance threshold, those who are not in work, or pensioners.

So it’s not strictly accurate to say that the £330 a year figure applies to “everyone listening”.

And while Mr Sunak did raise the amount people can earn before paying national insurance, he also decided to freeze the income tax and national insurance thresholds for four and three years respectively.

That means that, rather than rising with inflation each year as might otherwise have happened, the level at which people start paying more income tax and national insurance will stay the same for the next few years, even as the value of their earnings is chipped away at by inflation.

As the independent Institute for Fiscal Studies (IFS) think tank explained after the Spring Statement, the net effect of this is “to raise taxes for almost everyone”.

FactCheck understands from Mr Sunak’s team that he was using the £330 figure as a shorthand and was not giving a full list of every policy he introduced.

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