Coming off his fresh victory in the House of Commons, British Prime Minister Rishi Sunak took to social media to reflect back on the government’s successful year. In the post, the No. 10 detailed the administration’s top three achievements this year, namely halving inflation, cutting taxes, and increasing the national living wage.
We’ve been working to reduce inflation and support you with the cost of living.
And we’re delivering
Inflation halved to 4.6%
— Rishi Sunak (@RishiSunak) December 13, 2023
Sunak On halving inflation
When Sunak presented his five pledges for 2023 to the public at the beginning of the year, “halving inflation” was his top priority, as according to him, this was the most effective way to reduce the cost of living and provide financial security to families.
The inflation rate at that time was 10.7% (statistics from October to December 2022), which meant that the government would have to bring the inflation rate down to around 5.3 percent by year-end.
In September, inflation remained stable at 6.7%, with predictions that it would not fall below 5.1% until December. However, in an unexpected turn of events, the next month saw a significant drop, from 6.7% to 4.6%, owing to lower gas and electricity prices.
This meant that, three months ahead of schedule, Sunak had crossed one of his five pledges off his list.
On cutting taxes
In terms of taxes, Sunak stated that the government is cutting national insurance contributions so hardworking individuals can keep more of their earnings.
Effective January 6, 2024, the main rate of tax will be reduced from 12% to 10%. This implies that for every worker who earns £35,400 per annum, only £450 would be deducted.
This also implied that, on an average salary of £38,900, a full-time nurse would receive an annual gain of over £520, while working families with two earners would benefit from a gain of £900. The tax cut will benefit around 27 million workers.
Sunak added that the government is also reducing and simplifying taxation for 2 million self-employed people.
On increasing national living wage
Last month, Chancellor Jeremy Hunt’s autumn statement revealed several significant changes that would make British lives easier. And this included increasing the national living wage from £10.42 to £11.44 an hour starting in April 2024, constituting the highest raise the UK has seen in over a decade.
This amounts to a wage increase of more than £1,800 per year for a full-time employee. The rise in wages will also apply to people between the ages of 21 and 22, who are currently earning the national minimum wage.
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