Even Hunt’s own deputy ‘alarmed’ by high taxes
JEREMY Hunt’s deputy has revealed he is ‘alarmed’ at the level of tax people are paying amid a growing clamour for cuts.
John Glen, Chief Secretary to the Treasury, said the Government would ‘love’ to be able to slash tax but needs to be responsible.
Ministers are under increasing pressure to unveil cuts for households and businesses in this month’s Autumn Statement.
Calls have mounted after the King’s Speech earlier this week, which many Tories believe did not go far enough to improve the Conservative Party’s electoral chances.
MPs are urging the Chancellor to use any ‘fiscal headroom’ - the amount by which the Government could cut taxes or increase spending without breaking its fiscal rules – at the Autumn
Statement on November 22 to lower the tax burden.
The Institute for Fiscal Studies has forecast that taxes will hit 37 per cent of national income next year – a post-war high.
Some estimates suggest Mr Hunt could have around £13billion of fiscal headroom – double the level forecast at the March Budget.
Mr Glen told The House magazine: ‘I think there’s plenty in my party who are pretty alarmed at the level of tax... I’m alarmed at the amount of tax.’
But he said: ‘ Debt interest spending in 2022 to 2023 was £112.1billion; that’s more than six per cent of GDP. That’s higher than any G7 nation. Those are the facts. They’re unpalatable facts, but they can’t be avoided.
‘We’d love to be able to cut more, but we’ve also got to be responsible, make the numbers add up, see debt falling at the end of the period and deal with our primary consideration, which is inflation.’
Mr Glen said there is ‘no shortcut’ to dealing with the economic fallout of the Covid pandemic and the Ukraine war.
‘I want to give more money back, but I want to do that responsibly,’ he said, adding that the ‘amount of discretion’ he had was not great as some MPs ‘like to talk about’.
But last night Tory former cabinet minister David Jones said the Chancellor needed to use any fiscal headroom to ‘fulfil his aim to be a taxcutting Chancellor’. He added: ‘He should cut corporation tax, to encourage businesses to establish themselves and expand in the UK, creating jobs and wealth. He should also look at personal taxes. A cut in income tax would do much to help hard-pressed families.’
Treasury sources said the Chancellor will test whether any personal tax cuts are possible against whether they are affordable, and whether they are inflationary.
Isabel Stockton of the Institute for Fiscal Studies think-tank, said there was ‘no reason to expect a war chest to suddenly open up’ for the Chancellor to cut taxes.
‘I want to give more money back’
QUEEN Elizabeth II was crowned in Westminster Abbey, the first satellite – Sputnik – was launched into space and Britain went to war in Korea.
That distant decade, the post-war 1950s, was also the last time the UK groaned under such a high tax burden.
The fact that the current crippling level has been allowed to happen under a Conservative government is truly depressing.
Chief Secretary to the Treasury John Glen admits he is ‘alarmed’ at how much people and businesses are having to pay.
He’s not alone. The great majority of Tory voters are utterly disillusioned by the failure of successive chancellors to cut taxes.
What is Jeremy Hunt going to do about it? After the King’s Speech was greeted in many quarters with indifference, the upcoming Autumn Statement takes on greater importance for the Government.
Unless voters begin to feel better about themselves and the economy, the Tories have little chance of winning the next election.
So Mr Hunt must ditch the caution and pledge to use some of the £13billion ‘fiscal headroom’ he has got to give voters what they crave – more money in their pockets.
Lower taxes reward hard work and aspiration, create jobs and investment, and boost growth. An increasingly weary electorate needs a good reason to vote Tory. Tax cuts are the very thing to revive the party’s flagging fortunes.