The Government on Monday dangled the prospect of more tax cuts this year as it gears up for a General Election in the autumn.
Rishi Sunak said “good progress” had been made on his economic pledges, including to cut debt and halve inflation.
“Inflation is the most important one. I’m pleased that we’ve delivered that ahead of schedule,” the Prime Minister said at an event in Lancashire.
“It happened because we took difficult and responsible decisions to control spending and borrowing and welfare and allow the Bank of England to get on and do its job.
“And because we did all of that and successfully halved inflation, we are now in a position where we can cut your taxes.”
The PM warned that Labour leader Sir Keir Starmer “would just take us back to square one”.
“He has been Leader of the Opposition for four years now and in that time, he hasn’t said what he would do differently. That’s because he doesn’t have a plan. He just snipes from the sidelines instead.”
But Sir Keir on Sunday accused Mr Sunak of putting “vanity before country” if he is waiting to clock up two years in Downing Street in November, before calling an election.
“And so my challenge to him would be: if you’ve got a plan, set the date,” the Labour leader said on Sky News. “If you haven’t got a plan, just get on with it as quickly as possible.”
With Labour well ahead of Mr Sunak’s Conservatives in the polls, the Government has been stepping up its tax-cutting rhetoric after reducing National Insurance at the start of the year.
Treasury minister Bim Afolami made clear more tax reductions are on the way.
“It’s the beginning of a tax cutting year,” he told LBC Radio on Monday.
Chancellor Jeremy Hunt is widely expected to announce more tax cuts in his March 6 Budget, possibly to income tax or inheritance tax.
There is even talk at Westminster that Mr Hunt could deliver another wave of tax reductions in the autumn.
However, the tax burden is currently still rising towards being the highest since after the Second World War.
Mr Afolami trumpeted the cut to the main rate of National Insurance from 12 per cent to 10 per cent, with similar reductions for the self-employed, which came into force on Saturday.
Mr Hunt has stressed that the move is the “largest ever cut to employee and self-employed National Insurance”, benefiting 29 million working people at a cost of around £9 billion.
But in his Autumn Statement he did not ease the Government’s threshold freeze policy.
The personal allowance is currently frozen at £12,570, above which people start paying income tax, and they move into the higher rate if they earn more than £50,270.
The policy is raking in tens of billions of pounds more for the Treasury.
The Liberal Democrats have stressed that if it is not relaxed, it will mean 550,000 more Londoners paying the higher rate of income tax by 2027/28.
Mr Afolami, though, insisted that Government decisions had paved the way to allowing tax cuts to be started this year.
He added: “It comes because of the careful management of the economy. That’s why now we can begin the process of putting money back into people’s pockets. And that’s what this (NI) tax cut is about.”
Sir Keir and shadow Chancellor Rachel Reeves are reported to also be considering tax cuts but have stressed that their priority will be sticking to their fiscal rules including on reducing the nation’s debt.
The PM has said that his “working assumption” is that the general election will happen in the second half of the year.
Leading political expert Sir John Curtice, Professor of Politics at Strathclyde University, has suggested election day could be November 14, with Mr Sunak using his speech at the Tory annual conference in Birmingham on October 2 to announce he is going to the country.
