Stats watchdog rebukes Treasury minister over ‘misleading’ tax-cut claim

UKSA chair says comments claiming taxes for average earner have fallen by £1,000 could have misled the public
Laura Trott. Photo: Tayfun Salci/Alamy

By Tevye Markson

20 Feb 2024

Statistics watchdog Sir Robert Chote has criticised a Treasury minister for potentially "misleading" tax cut claims.

Chote, who is the chair of the UK Statistics Authority, said the public could have been “misled – or at least confused” by statements made by Laura Trott, the chief secretary to the Treasury, in the House of Commons in November.

Trott said on 22 November that “taxes for the average worker have gone down by £1,000” in a debate on the Autumn Statement. Then on 30 November she said “taxes for the average worker will have gone down by £1,000 since 2010” in a discussion on National Insurance contributions (reduction in rates) bill, which cut the main rate of employees’ NICs from 12 to 10 per cent.

The UKSA was alerted to the comments by Labour MP Dame Angela Eagle, who raised concerns about “the repeated use of inaccurate and misleading claims by government ministers regarding alleged cuts in taxation” in a letter to Chote.

The MP also wrote to the statistician about comments made by Bim Afolami, the economic secretary to the Treasury, on 8 January on BBC Radio 4's Today programme. Afolami said “taxes are coming down”, adding that for “an average earner on £35,000 a year, they will be £450 better off as a result”.

Eagle pointed out that the Office for Budget Responsibility’s November 2023 economic and fiscal outlook stated that while tax changes in the Autumn Statement reduce the tax burden by 0.7% of GDP, taxes will reach a post-war high of 37.% of GDP by 2028-29. In 2010, it was 31.96% of GDP.

She added the Institute for Fiscal Studies concluded that the average individual will experience a “tax increase” in 2024, with savings from the National Insurance contributions cut negated by “much bigger tax rise” caused by the freezing of thresholds and allowances.

Chote said listeners to the Today programme were “unlikely to have been misled” by Afolami’s claim as it was made on the first working day after the National Insurance Contributions tax took effect “and he could reasonably have been assumed to be referring to that change specifically”.

He said Afolami “was not as explicit about that as he could have been” but added that the interviewer “immediately put this in the context of broader personal tax changes and trends”, thus making it unlikely that listeners would have been misled.

However, he said the public “are more likely to have been misled – or at least confused” by Trott’s statements, “both of which would probably suggest to a typical listener that the average worker’s overall tax bill has fallen in cash terms”.

The Autumn Statement set out that the combination of the change to NICs with above-inflation increases to tax thresholds since 2010 means “the average earner will pay more than £1,000 less in personal taxes in 2024-25 than they otherwise would have done” – not, as Trott claimed, that the average worker would be paying less tax than in 2010.

Chote said: “Debating points in the House are often necessarily succinct and shorn of some nuance, as you will appreciate. But to maintain trust and confidence in their statements, and to avoid the need for subsequent clarification, ministers and other members need to consider how a typical listener is likely to understand what they say.

"This is perhaps especially important when they are provided with ‘round number’ talking points derived from very specific methods of calculation.”

He added that the Office for Statistics Regulation is “increasing its engagement with government departments, including the Treasury, to ensure future communications do not have the potential to mislead and comply with the principles of intelligent transparency”.

A Treasury spokesperson said: “As the UK Statistics Authority make clear, the average earner will pay over £1,000 less in tax in 2024-25 than they otherwise would have done, thanks to above-inflation increases to tax starting thresholds since 2010 and the National Insurance cut announced at Autumn Statement. This was set out in the official Autumn Statement document.” 

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