Budget tax cuts are a Tory con, says Keir Starmer

Labour has said tax cuts in the Budget are a "Tory con", which leaves people paying "more for less".

Jeremy Hunt has announced a further 2p cut to National Insurance and changes to child benefit.

The chancellor said the moves would address "unfairness" in the tax system and help "make work pay".

But Labour leader Sir Keir Starmer said freezing the thresholds when people start paying tax meant more people were being dragged into higher tax bands.

The combined effect of cutting National Insurance and freezing income tax thresholds means people earning less than £25,000 are worse off, while those on £26,000 to £60,000 are better off and those earning £60,000 to £120,000 will see little difference.

Sir Keir said Labour welcomed the cut to National Insurance but argued the failure to grow the economy meant the government was asking people "to pay more and more, for less and less".

"[The public] recognise a Tory con when they see it, just as they did in November. Give with one hand, take even more with the other," he told the Commons.

National Insurance contributions are paid by employees and the self-employed on their earnings, as well as employers, with the amount paid dependent on an individual's salary.

Under the changes from 6 April, National Insurance for employees will be reduced from 10% to 8%, while for self-employed people the rate will fall from 8% to 6%.

It matches the cut announced in last year's Autumn Statement and is worth around £450 a year for someone on a full-time salary of £35,000.

Mr Hunt also pledged to continue to reduce National Insurance, when it was "responsible" to do so and could be achieved without increasing borrowing and compromising public services.

In an attempt to create a dividing line with Labour, Mr Hunt said "keeping taxes down matters to Conservatives in a way it never can for Labour", arguing the government "should let people keep as much of their own money as possible".

However, some Tory MPs had wanted the chancellor to go further and reduce income tax as well.

This would have been more expensive but supporters of the idea believe income tax is better understood by voters so changes would have a greater political impact.

They also argue the cut to National Insurance announced in October failed to improve the Conservative Party's poll ratings and fear the same outcome following the Budget.

The level when someone no longer receives any child benefit at all will also rise from £60,000 to £80,000.

Child benefit is paid to families in the UK with children under the age of 16, or under 20 if they are still in full-time education or training.

The current system has been criticised as unfair because the threshold is based on the highest-earning parent, rather than a family's combined salary.

That means a family where two parents jointly earn more than £50,000 can receive the full amount.

To address this, Mr Hunt said the government would consult on moving to a household-based system by April 2026.

Badging his plan as "a Budget for Long Term Growth", Mr Hunt argued lower taxes would help the economy by encouraging people into work.

It comes against a backdrop of sluggish economic growth, with the country falling into recession at the end of last year.

He said the government's independent forecaster, the Office for Budget Responsibility, was also expecting inflation - the rate prices are rising - to fall to the target rate of 2% in a few months' time.

Other measures announced include:

On public services, the chancellor said he would keep the planned increase in day-to-day spending at 1% above inflation every year until 2029.

However, as some departments like health and schools have protected budgets, that means others such as justice and local government could see significant budget cuts.

Mr Hunt said the public sector would also need to improve efficiency to deliver better value for taxpayers, and announced investment in new technology to help free up time for doctors, nurses and police, including £3.4bn to modernise NHS IT systems.

There was also an extra £2.5bn to help tackle NHS pressures.