Mandarins urged PM to boost immigration

TREASURY officials advised Rishi Sunak that cutting taxes would have little impact on growing the economy and he should instead focus on boosting immigration.

According to leaked Treasury documents presented to Mr Sunak’s senior team in late 2022 before he became prime minister, civil servants said personal tax cuts would have a “low impact” on boosting growth despite coming at a “medium fiscal cost”.

The Treasury documents were given to Mr Sunak shortly after Liz Truss sparked a market panic by announcing unfunded tax cuts in her mini-budget.

High-skilled immigration and changing planning rules to build more homes would both have a “high impact” on the economy with a “low” fiscal cost, the papers seen by Bloomberg said.

Tory backbenchers said yesterday the documents showed that Treasury civil servants cannot be trusted to boost growth. A source close to the Prime Minister said: “Advisers advise and ministers decide. This advice was wrong but ministers disregarded it, decided to cut taxes and have been proven right.

“So voters have a choice between tax cutting Conservatives or £28bn tax rises with Labour this year.”

Jeremy Hunt, the Chancellor, cut National Insurance by 2p in the autumn and is expected to cut income tax or inheritance tax in his March Budget. No10 said in late 2022 that tax cuts would not help the economy as inflation was too high.

But now they say reduced inflation has made tax cuts affordable with price rises falling from their peak of 11pc in 2022 to 4pc in December.

Sir John Redwood, who served as the head of Margaret Thatcher’s Downing Street policy unit, said the documents showed that the Treasury was “very wrong”.

He said: “Two really bad ideas have come out of the Treasury here. More migration does not boost per capita incomes, it keeps wages down and puts a big increase on public expenditure to provide services and housing.”