CUT TAXES OR LOSE ELECTION, TORIES WARNED

As Treasury suggests Hunt has NO plans to ease tax burden in Spring Budget, Conservative MPs plead with him to reconsider JEREMY Hunt was warned last night that failure to cut taxes in the upcoming Budget will cost his party the next election.

Tory MPs reacted with alarm yesterday when Treasury insiders confirmed the Chancellor was planning a ‘slimmed-down’ statement on March 15, with no proposals for tax cuts. Mr Hunt has warned ministers that the public finances will be no better in March than they were in November when he raised taxes to a post-war record – and cutting

them now would prolong the pain of ‘stubbornly high’ inflation. He is expected to unveil a plan for growth but sources said there was ‘no money’ for tax cuts to help kickstart the flagging economy.

A Treasury insider ruled out any ‘deviation’ from the drive to halve inflation, which fell slightly to 10.5 per cent yesterday.

The hardline stance triggered warnings from Conservative MPs that the Chancellor needed to return to the party’s traditional tax-cutting agenda this year.

Former leader Sir Iain Duncan Smith said: ‘We have got to get growth going. This Government will sink without trace if we don’t get growth going by the middle of this year – we won’t have a hope of winning the election.

We are already over-taxed and it is quite clear we cannot tax ourselves out of a recession.’

Fellow Tory Sir John Redwood also warned tax cuts were essential – and said some could even boost overall revenues by triggering growth. He added: ‘We cannot address the issue of growth without some tax cuts. They must be affordable, of course – but the best way to bring borrowing down and boost revenues is to grow the economy.’

The warnings came as:

■ Former Bank of England deputy governor Sir John Gieve predicted it would ‘push harder’ on interest rates to curb inflation;

■ Business Secretary Grant Shapps prepared to outline plans today at the World Economic Forum in Davos to ‘scale up’ the UK economy;

■ The BoE’s former governor Mark Carney was upbeat about the economic outlook in a speech at the same event;

■ But CBI chief Tony Danker warned investors were pulling out of the UK because of the lack of a plan for growth;

■ The UK’s largest North Sea oil and gas producer warned of job cuts.

The Office for Budget Responsibility said Mr Hunt’s November Budget would raise the overall tax burden to 47 per cent of GDP this year – up from 39 per cent before the pandemic, and the highest level since the Second World War.

Mr Hunt said the package of tax rises and spending cuts was needed to restore confidence and stability in the wake of the negative reaction to Kwasi Kwarteng’s ill-fated mini-budget in September. Privately, Tory MPs have already begun to lobby the Chancellor to hold down fuel duty, which is due to jump by 12p a litre in March. Senior figures are also pushing him to relax rules on the tax treatment of the self-employed, arguing they are a ‘barrier to growth.

And there is pressure to restore a planned cut in income tax before the election, which was ditched by Mr Hunt last year.

Allies of Boris Johnson are among those who believe that tax cuts are essential to the Tory party’s electoral prospects.

Meanwhile sources close to Liz Truss said she was set to use her first public intervention since leaving No 10 to make the case for lower taxes. The former PM attended the launch on Tuesday of a new Conservative Growth Group of MPs.

ACCORDING to the Gospel of Jeremy Hunt, it’s a virtue of this Conservative government that it will restore order to Britain’s finances after they were left in disarray by Covid, the energy crisis and the ill-fated Truss premiership.

The public (more economically literate than politicians assume) know the country can’t go on living beyond its means, saddling future generations with more debt.

Still, it is dismaying that the Chancellor is not considering tax cuts in March’s Budget.

With beleaguered families and firms already reeling under the heaviest burden since the war, that would be the best way to fuel growth, job creation and prosperity for all.

Indeed, when the State is so bloated, it goes against key Conservative values not to cut taxes. They should be at the front, centre and back of Mr Hunt’s mind.

If there is no clear blue water between the Tories and Labour on taxation at the election, Sir Keir might as well start measuring up Downing Street’s curtains.