Rishi Sunak’s tax cuts a ‘raw deal’, Labour to claim in ad campaign

The party says income tax and national insurance thresholds, frozen since 2021, mean many families have been drawn into higher tax bands.

The main rate of national insurance will be lowered by two percentage points to 10% from Saturday (Dominic Lipinski/PA) (PA Wire)

The Government’s cut to national insurance rates will leave families with a “raw deal” because of hidden tax rises, Labour is set to claim in a new campaign.

As the political parties kick off an expected general election year, Labour will unveil a poster campaign of what it calls “Rishi’s raw deal” for taxpayers ahead of the reduction in national insurance contributions on January 6.

The poster will be unveiled on a shopfront and ad van in Wellingborough, where Labour is seeking to overturn a Tory majority in an upcoming by-election.

Local MP Peter Bone was ousted from the Conservative Party and a by-election was triggered by local voters after his suspension from the Commons for breaching the MPs’ code of conduct.

The ad will also be published online and in regional newspapers across the country.

It will feature a colourful image of the Prime Minister, in the style of a mock shopping deal advert.

From Saturday, the main rate of national insurance will be cut by two percentage points to 10%, as promised by Chancellor Jeremy Hunt in the autumn statement in November.

Ministers have previously said cutting the main rate for employees is a tax cut worth £450 for the average employee on £35,400 in 2024/25.

Working people know that this month’s tax con is just a cynical giveaway from a weak and out-of-touch Tory government that is desperate to cling onto power, rather than a credible plan to fix our broken economy

Shadow chancellor Rachel Reeves

But Labour point out that income tax and national insurance thresholds, which have been frozen since 2021, mean that many families have been drawn into higher tax bands.

Shadow chancellor Rachel Reeves said: “Under Rishi Sunak’s raw deal, for every extra £10 people are paying in tax they are only getting £2 back.

“Working people know that this month’s tax con is just a cynical giveaway from a weak and out-of-touch Tory government that is desperate to cling onto power, rather than a credible plan to fix our broken economy.

“After 14 years of working people being left worse off under the Conservatives, it’s time for change.

“Rishi Sunak should call an election and give the public the chance to vote for a changed Labour Party that will change Britain for the better.”

The Liberal Democrats also pointed to the impact of frozen tax thresholds on the public, describing 2024 as the “year of the squeezed middle”.

Research by the party suggests that the combined impact of taxes, mortgage rises and food inflation could be a more than £4,700 “hit” on the average household.

The Lib Dems are calling for a cost-of-living rescue package, with the party’s Treasury spokesperson Sarah Olney MP saying: “2024 is set to be the year of the squeezed middle, as families continue to be clobbered by unfair tax hikes, soaring mortgage payments and higher shopping bills.

“People are worried sick about paying the bills and having to make big cutbacks just to get by.

“But instead of helping, Rishi Sunak is hitting families with yet more tax rises while the Conservative Party soap opera continues in Westminster.”