Richard has welcomed tax cuts worth £900 for the average worker on £35,400 a year, coming into effect this month for people across North East Bedfordshire.
At the Budget 2024, the Chancellor announced that National Insurance contributions will be cut to eight per cent. Taken together with the cut to National Insurance announced last year, the Conservatives have delivered a tax cut worth a total of £900 a year for a worker on the average salary of £35,400.
Cutting National Insurance is the fairest and most effective way to incentivise work and drive growth, whilst also reducing the overall tax burden. National Insurance is also being cut for the self-employed, delivering a combined tax cut worth £650 for the average earnings of £28,000 a year. These tax cuts will come into effect on 6 April 2024, meaning people will see more money in their April pay packets.
If you work in the UK you have the lowest personal tax rate on your earnings in the G7 group of major economies. The effective personal tax rate for an average full-time employee was 23.6 per cent in 2010, and thanks to these NICs cuts will fall to 19.6 per cent by the end of the forecast in 2028-29.
Richard has also welcomed the protecting of the Triple Lock and uprating of the State Pension by 8.5 per cent in April 2024, in line with average earnings growth and protecting pensioners’ incomes. This follows a record increase of 10.1 per cent in 2023-24. Since it was introduced in 2011, the triple lock has protected the state pension with a cumulative increase after inflation of 20% according to the Institute for Fiscal Studies.
The National Living Wage also increases this month to £11.44 - a rise of 9.8 per cent for those on the lowest pay - equivalent to an annual pay boost of £1,800 for 2.7 million workers making sure it always pays more to work than be on benefits. The proportion of workers on low pay has halved since 2010 thanks to the National Living Wage.
The cut to the Higher-Income Child Benefit charge will put up to £1,664 back into the pockets of middle earning families and together with the introduction of 30 hours free childcare for children between nine months old up to school age from September 2025 will be a major boost to family finances: a package worth an average of £6,900 for every family with a two-year-old child.
Recently, Richard welcomed these cuts in the House of Commons during the debate on the NI Reduction in Rates Bill. In his intervention on the Minister, Richard looked forward to the future of National Insurance, arguing that it should be converted back to its original Intention - a savings plan to provide each worker with monies for their old age.
Commenting Richard Fuller MP said:
The budget included a welcome cut in National Insurance : the second this year. The Conservatives are the only party with a plan to cut taxes for working people because we believe that hard work should be rewarded.
Since the beginning of 2023 we have been working on five priorities, three of them economic, to halve inflation, grow the economy and reduce debt. Inflation has fallen from 11.1 per cent to 3.4 per cent, wages are rising, mortgage rates are starting to come down and debt is on track to fall. The long-term decisions taken by the government have protected the state pension triple lock, continued record increases for those on the lowest wages, and cut taxes for workers and their families.
Our tax rates are currently high because we have to pay back the money spent on furlough and other support programmes during Covid, as well as the financial support given to families during the energy price spike caused by Putin’s invasion of Ukraine.
The Chancellor is right to cut taxes whenever he can : that is the difference with the Labour Party which will seek to make the current level of taxes the “new normal”.
