Boris Johnson and 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 the cost-of-living crisis.
Writing in the Sun on Sunday, the Prime Minister and Chancellor said when the National Insurance threshold rises overnight this coming Wednesday from £9,880 to £12,570 it will save 30 million British workers up to £330 a year.
They added that the historic tax cut will amount to £6 billion 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 outline 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 is a “big chance” to fix unnecessary cost pressures for people and businesses across the UK.
Speaking at a press conference at the close of the Nato summit in Madrid on Thursday, Mr Johnson said the “very, very tight labour market” and difficult “balance of our energy mix” add to inflationary pressures.
Fears are 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, 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 said on Wednesday 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.
New HM Revenue and Customs figures showed that some 6.1 million taxpayers are projected to be paying income tax rates at the higher rate of 40% or the additional rate of 45% in 2022/23.