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UK opts for ‘biggest tax cut in a decade’

admin2022-07-0513

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,Tackling cost pressures: Factory workers in action in the United Kingdom. The historic tax cut will result in 70% of British workers paying less in National Insurance. — Reuters

LondoN: British prime minister Boris Johnson (pic) and chancellor of the exchequer Rishi Sunak have penned a joint article to outline what they are calling “the single biggest tax cut in a decade” in a show of unity on Britain’s cost-of-living crisis.

Writing in the Sun, the prime minister and chancellor said when the National Insurance threshold rises on Wednesday, it will save 30 million British workers up to 330 (US$400 or RM1,763) a year.

They added that the historic tax cut will amount to 6bil (RM32bil) in value and lift 2.2 million people out of paying “any National Insurance or income tax on their earnings at all”, with “around 70% of British workers” paying less National Insurance.

In the rare joint op-ed from the pair, they outlined the billions the government is planning to spend to cushion the blow of inflation by also providing relief for council tax bills, fuel duty and energy costs.

It comes after the prime minister’s denial that his government is being “complacent” about spiralling inflation and said the “cost of freedom” is “always worth paying” amid soaring costs exacerbated by the Ukraine war.

The prime minister said there was a “big chance” to fix unnecessary cost pressures for people and businesses across the United Kingdom.

Speaking at a press conference at the close of the Nato summit in Madrid on Thursday, Johnson said the “very, very tight labour market” and difficult “balance of our energy mix” added to inflationary pressures.

Fears were continuing to mount that the cost-of-living crisis could tip the UK into recession as defined by two quarters in a row of falling output.

This comes as rocketing inflation sees households and businesses rein in spending.

Inflation has already reached a 40-year-high of 9.1% and is set to rise past 11% in the autumn.

Bank of England governor Andrew Bailey has said that soaring inflation will hit Britain harder than any other major economy during the current energy crisis and that output is likely to weaken earlier and be more intense than others. — dpa


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