Hammond vows to cut workers’ taxes

PHILIP Hammond is drawing up plans for a new Tory tax pledge that would guarantee the overall tax burden on ‘working people’ is cut as the economy grows.

The Chancellor is urging Theresa May to use the Conservatives’ manifesto to ditch David Cameron’s controversial ‘tax lock’, which guarantees no increases in income tax, National Insurance or VAT, arguing it leaves too little ‘flexibility’ to manage the economy.

He is looking to make a broader pledge instead to see ‘the burden of taxation on working people falling’ as the economy grows.

Speaking at a private breakfast meeting this week, he told an audience of businessmen that the Tories would ‘go on demonstrating’ they are the party of low taxation. According to a source at the meeting, he said: ‘In our DNA, we are a low-tax party. None of us – me, Theresa May – came into politics to see taxes going up. We are in politics because we want to see taxation low and as the economy grows, ideally the burden of taxation on working people falling.’

Tory ministers are also debating whether to keep the 2015 pledge to raise the threshold for paying 40p tax to £50,000. Some want to focus resources on raising the personal allowance, while others argue that the party has a duty to also help those on higher incomes.

Mr Hammond also hinted at fresh investment in infrastructure and education to drive up productivity.

He said increasing Britain’s ‘stubbornly low’ productivity would be a top priority.