This week tens of millions of workers will receive their pay slips for the month of January and with them a tax cut. National Insurance is going down, so take-home pay is rising.
Polls show that voters think Labour is more likely to cut tax than the Tories, a surprise weapon for Starmer
The NI tax cut is meant to signal a ‘gear shift’ – as the Prime Minister told this magazine last month – when it comes to taxation. Rishi Sunak and Jeremy Hunt have hinted that more cuts may follow in the spring Budget.
Will voters be grateful? In the past, the governing party has benefitted from pre-election tax cuts. Ahead of the Tories’ surprise victory in 1992, Norman Lamont introduced a 20p income tax rate. In 2005, Gordon Brown raised the thresholds for paying inheritance tax and stamp duty. In 2015, George Osborne increased the personal income allowance and cut beer duty before his party won a surprise majority.
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