James Forsyth James Forsyth

Rishi Sunak has just defined the next election

(Getty)

The biggest surprise of Rishi Sunak’s spring statement was the announcement that the basic rate of income tax will be cut by one penny come 2024. This is the first cut in the basic rate since the cut to 20p announced by Gordon Brown in his last Budget in 2007, which was of course partly paid for by abolishing the 10p starting rate of tax.

Cynics will be quick to suggest that there is a long way to go before 2024 and so the tax cut might not happen. But this is to ignore the politics. The most likely date for the next election is May 2024. It would be bizarre, and electorally disastrous, for a government to announce that it intends to cut taxes just before that date and then fail to do so. Sunak has lashed himself – and the government – to the mast.

You can be certain that the Treasury will use the primacy of this tax cut to knock back various demands for spending in the next two years. The message will be that this tax cut can only happen if spending is kept under control elsewhere. Indeed, it is revealing that Sunak has not chosen to fund departments to make up for inflation. Departmental costs will now be considerably higher than when their spending settlements were agreed last autumn – but to make up for inflation would have cost £18 billion over the course of the parliament and made it far more difficult to cut income tax or increase the National Insurance threshold.

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