Sunak feels rising Tory heat over tax increases
RISHI SUNAK faced new warnings today from Conservative MPs against an immediate rise in corporation tax in Wednesday’s Budget.
Pressure to postpone business tax hikes until after the pandemic is over increased as the Treasury revealed more about the contents of the Chancellor’s Red Box, including mini-giveaways for military veterans with mental health problems and people whose lives were blighted by the Thalidomide scandal.
Mel Stride, chairman of the Treasury select committee, said it would be “reasonable” to put up corporation tax by the end of the parliament — but not yet.
“The last thing we want from the Chancellor now is jacking up taxes and dampening down the animal spirits of the economy,” he told LBC.
Steve Baker, the influential former Brexit minister, fired a warning shot from the Tory Right-wing by retweeting an acid comment made by TV presenter Emma Kenny, who hit out at reports that Mr Sunak intends to raise corporation tax from 19p to 25p. Ms Kenny claimed three million people who had had
no financial support would “lose even more” if the Chancellor went ahead.
Former Welsh Secretary John Redwood, a standard bearer of the Thatcherite old guard, followed up a weekend article against big tax rises to repair the public finances by saying: “The way to get the deficit down is to get back to work as soon as possible. Spending shot up and tax revenue collapsed thanks to closure and job losses. It’s time to reverse the bad news and to promote recovery.” The Standard last week called on the Treasury to help high street retailers, pubs and restaurants get back on their feet when lockdown restrictions ease. The Chancellor is now set to announce £5 billion of restart grants for the stricken sector on Wednesday.
Other key Budget measures confirmed by the Treasury so far include:
⬤ A new Thalidomide Health Grant and a commitment to lifetime support for more than 400 people needing personalised specialist care, rehabilitation and treatment because they were injured by the morning sickness drug.
⬤ Military veterans suffering mental health problems will receive an extra £10 million in support. Mr Sunak called it “a crucial part of repaying the huge debt we all owe them”.
⬤ Sovereign green savings bonds will give the opportunity to buy bonds that will fund measures to transform the UK to net zero carbon emissions by 2050.
⬤ A return of 95 per cent mortgages with loans partly guaranteed by the Government to help people onto the housing ladder.
⬤ £1.65 billion more cash to bankroll the roll-out of the Covid vaccine, plus extra testing and research.
⬤ Fast-track visas for “top talents” from business and science wishing to locate to the UK, including all Nobel prize winners.
Key measures that are widely expected but not officially confirmed include postponing an increase in fuel duty on vehicles that was due this year and extending a VAT cut to five per cent for the hospitality trade. The stamp duty holiday and other measures such as furloughing could be extended until June to support business out of lockdown. Key measures that have been predicted by pundits
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but are not confirmed include “stealth taxes” on income, raising £6 billion by freezing allowances and thresholds for higher rates.