The audacity of Kwarteng’s tax cut for the rich

George Osborne dreamed about it and Rishi Sunak told friends that he’d like to do it if everything went well and he was feeling brave. But this morning Kwasi Kwarteng has gone ahead and done it.  The ‘additional rate of tax’ – set up by Gordon Brown as a trap for the Tories in 2009 – has just been abolished. Right now, those earning more than £150,000 per year will pay 48.25 per cent on every pound they earn (45 per cent income tax plus 3.25 per cent National Insurance). From April next year, it will fall to 42 per cent (40 per cent income tax plus 2 per cent NI).

Will Rishi Sunak stick to his ‘golden rule’?

Here’s the Rishi Sunak paradox: he proudly defines himself as a low-tax Tory but under his watch taxes are reaching a 71-year high. There are plenty of Tories who want to ditch next month’s National Insurance increase but Sunak is firmly opposed – mainly because he wants to link up in people’s minds that more money for the NHS and social care doesn’t manifest out of thin air. But pressure is on at tomorrow’s spring statement to make clear what kind of Chancellor he really is. Does he come from the long line of Tories who like tax cuts in theory but not in practice – or does he have

Rayner hits Johnson where it hurts

The first PMQs of the year gave us a preview of the political debate we’ll be having for the next few months. Labour went after the government on inflation. Angela Rayner asked Boris Johnson why he had dismissed fears over it as unfounded back in October: Johnson denied he had said it — which is an odd claim given what he said in that interview. She then punched the Tory bruise, by asking why Johnson wasn’t cutting VAT on fuel, as he had said he would do during the EU referendum. Johnson made the point that this help wouldn’t be well targeted, which is true. But the political pressure for this from

Will the Tories cut taxes before the next election?

The Tory party has reached a fork in the road, I say in the Times today. One path involves sticking to the spending plans, hoping to cut taxes before the next election and getting rid of the new perception of them as tax raisers. The other drags them into ever more spending, led by big increases in public sector pay, and ends with them going to the country as a high-tax party. In his Budget speech and his address to Tory MPs, Rishi Sunak made clear that his preference was for the former approach, which should cut taxes before the country goes to the polls again. But sticking to even the spending

Rishi Sunak’s low tax pitch to MPs

Is Rishi Sunak a low tax chancellor? He certainly likes to tell anyone who will listen that he is. Yet his actions tend to suggest the opposite. The tax burden is currently on track to reach its highest level since the early 1950s, and while Sunak unveiled one big tax slash in the Budget in the universal credit taper rate cut, the main thrust of Sunak’s announcements was spend, spend, spend. Tonight Sunak addressed Tory MPs at a meeting of the 1922 committee. After announcing £150 billion in extra public spending, Sunak sought to convince his party that, despite this, he was committed to lowering taxes. Having said in the chamber that

Lewis Hamilton doesn’t need a knighthood

Given that I know about as much about Lewis Hamilton’s tax affairs as I do about Formula One motor racing it would be unwise for me to be churlish about his knighthood, announced in the New Year Honours list. For all I know, he could be making generous voluntary donations to HMRC. A few weeks ago, it was reported that his tax status was being vetted by the Palace, and it doesn’t appear to have prevented his name appearing on the honours list. Then again, it is hard to escape a suspicion that the big attraction for his decision to live in Monaco might just possibly have been the modesty