Oral Answers to Questions

Debate between Jeremy Hunt and Louie French

Tuesday 19th December 2023 Commons Chamber

[The Chancellor of the Exchequer (Jeremy Hunt)]

Thanks to the difficult decisions the Government have taken on inflation and debt, the autumn statement this year was able to deliver the biggest package of tax cuts to be scored since 1988.

[Mr French]

I very much welcome the tax cuts recently announced by the Chancellor and hope to see more announced soon, especially a rise in the higher rate threshold. As the Conservatives look to reduce the tax burden on working people, does the Chancellor share my concern that £28 billion-a-year unfunded spending commitments would likely see taxes rise and lead to higher interest rates if Labour were ever in government?

[Jeremy Hunt]

It is not just me but Paul Johnson of the Institute for Fiscal Studies who, when talking about Labour’s plan, has said that

“additional borrowing…drives up interest rates”,

which is, of course, a back-door tax rise on families with mortgages. But as it is Christmas, perhaps I could explain it this way: if Santa borrowed £28 billion, he might have more toys to give out this year, but he would also have debt interest to pay and fewer toys to give out next year.