Martin Lewis interviews Jeremy Hunt on economic plan
Martin Lewis clashed with Jeremy Hunt on Tuesday night as the money saving expert grilled the Chancellor over whether people were actually going to better off after his recent cuts to National Insurance.
Appearing on January 9's Martin Lewis Money Show, Mr Hunt insisted that he wants to cut even further to put more cash into ordinary people's pockets during the cost of living crisis.
But Mr Lewis floated the idea that he'd only brought in cuts to National Insurance on January 6 - a date he branded "unusual" so that people could see the modest benefit of the policy before fiscal drag means No10 taking more cash through taxes.
Mr Hunt insisted that "we wanted to bring it in as quickly as we could" in order that people could have vital cash "after a period in which taxes have gone up in order to pay for the cost of the pandemic".
The Chancellor - who has been repeatedly urged to cut taxes further with a general election looming - added: "We can't get all the way back to where we were before the pandemic in one go."
Martin Lewis clashed with the Chancellor on his ITV show (Image: ITV)
Mr Lewis pressed the Chancellor, saying that the freezing of tax thresholds showed the Government is "giving one hand and taking away with another" and that some would end up "thousands of pounds worse off" due to those thresholds not rising in line with inflation.
He explained to his ITV audience that if pay is going up in line with inflation but those thresholds stay where they are, then people are dragged into paying more tax into the Treasury's coffers.
Mr Hunt insisted that "we would like to go further as and when it's responsible to do so" but that spending by the Government in lockdown - when Rishi Sunak was Chancellor - had set the nation's finances back considerably.
The interview comes just days after Mr Hunt told the UK that its "dark days" were behind it in terms of the economic turmoil of the cost-of-living crisis.
The Chancellor insisted that Britons can expect more tax cuts from the Conservative Party as he sought to position the Tories to see off Sir Keir Starmer's Labour Party at the next general election.
He acknowledged the pain that had hit people's pockets across the nation after the Bank of England kept interest rates at a historic high of 5.25 percent at its last Monetary Policy Committee meeting.
Mr Hunt also said that the Government had been faced with a dilemma when Rishi Sunak took over as Prime Minister, citing the debt incurred as a result of the Tories locking down Britain's economy during the Covid-19 pandemic.
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Mr Hunt was quoted in the Sunday Express saying: “While we had to take some difficult decisions to help pay down the Covid-19 debt and the money we borrowed to help people through Putin’s energy shock, those dark days are thankfully fading into the distance.”
He added: “By kicking off the New Year with record tax cuts, we are changing gear and looking ahead to focus on just that, taking the long-term decisions required to drive growth in the decade ahead.”
A Governement source also told the paper: “While Sir Keir’s north London elite, with its strong ties to the radical left, continue to promise to go on a reckless ￡28billion spending spree without saying how they’d pay for it, we are investing responsibility in growth and job-creation, while giving millions of workers a tax cut worth ￡450 on the average wage this weekend."
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Martin Lewis is pictured outside Number 11 Downing Street before his interview with Mr Hunt (Image: Martin Lewis/X)
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The Chancellor was quoted one day after the changes announced in his Autumn Statement came into effect, as more than 27 million workers are paying less tax as of Saturday, January 6.
The drop in tax came as a result of Mr Hunt's decision to shave 2p off National Insurance payments which he confirmed to the House of Commons on November 22 last year.
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Mr Hunt has since said that his next Budget will be delivered on March 6 with speculation rife that he is eyeing inheritance tax for cuts.
There are also rumours that he could even cut a penny or two from income tax as the PM feels the need to offer some unambiguously good news to net a victory in this year's general election.
The poll is expected to be called in October, but Mr Sunak could trigger it as early as May.
Chancellor Jeremy Hunt insists the UK's dark days are behind it (Image: Getty)
But even if tax cuts are announced, previous six-year freezes on income tax and National Insurance thresholds will stretch all the way to 2028/29, dragging four million lower income workers into paying 20 percent in tax.
And more than three million are set to be dragged into the 40 percent band, with 400,000 more to pay the additional 45 percent rate in a process known as fiscal drag.
Fiscal drag occurs when incomes rise but tax thresholds do not rise, meaning that more money is handed over into the hands of the state.
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