TORIES’ TRIPLE TAX CUT BOOST
Government considers emergency package to help struggling households and businesses
A TRIPLE tax cut to ease the cost of living crisis is being examined by ministers.
rishi Sunak is already drawing up plans for a major package to help with energy bills in July.
But last night the Chancellor told business leaders he would cut their taxes in the autumn to prompt the investment needed to avoid a recession.
And a government source said Boris Johnson was considering an emergency tax cut for poorer families this summer.
One option under examination is a change to Universal Credit rules to let three million workers keep more of their earnings.
The moves came as official figures showed inflation jumped to 9 per cent in April, the highest level in 40 years.
Mr Sunak warned he could not ‘protect people completely’ from the cost of living squeeze. ‘There is no measure any government could take, no law we could pass, that can make these global forces disappear overnight,’ he told CBI business leaders.
‘The next few months will be tough. But where we can act, we will.’
Mr Johnson acknowledged that households were ‘struggling’ with inflation and pledged that ministers would ‘look at all the measures we need to take to get people through to the other side’.
Tory MPs yesterday lined up to call for immediate tax cuts and former Cabinet minister Jake Berry said it was ‘now or never’. He added: ‘It’s all very well to talk about budgetary measures in November but this cost of living crisis isn’t sticking to a neat parliamentary timetable – urgency is required.’
His warning came as: n Liz Truss led Cabinet calls for tax cuts, saying a ‘low-tax economy’ was the best way to boost growth; n The British Chambers of Commerce warned of a ‘real chance’ of recession; n Ministers prepared to cap interest charges on student loans amid fears rates could hit 12 per cent; n The PM again refused to rule out a windfall tax on energy giants, as Labour accused him of sitting on the fence; n Economists warned lowincome households, including many pensioners, already faced double-digit inflation; n Average petrol prices hit an all-time record of almost £1.68 a litre.
Treasury sources yesterday confirmed that the Chancellor was drawing up plans for a major package to help families cope with soaring energy bills this summer.
Ministers have been warned that the energy price cap could jump by anything from £500 to £1,000 when the regulator Ofgem makes its next assessment in August.
This could push average bills up from the current £1,971 to almost £2,500 or even £3,000 in the autumn when the new price cap takes effect.
Mr Sunak is expected to preempt the rise by unveiling a package of support before MPs break for the summer in July. Options being considered include: a repeat of the £200 ‘rebate’ he pledged in February; a further cut to council tax for homes in bands A to D; an increase in the Winter Fuel Allowance received by pensioners; and a rise in the Warm Home Discount Scheme.
All Scottish households in bands A to D also received the £150 council tax rebate, which councils have deducted from annual bills.
Sources said that ministers had not yet decided which of the options to pursue. The Treasury has ruled out calls from Labour and some Tory MPs for a full-blown ‘emergency budget’ this summer.
During clashes in the Commons, Labour leader Sir Keir Starmer said the Prime Minister ‘just doesn’t get it’.
He added: ‘He doesn’t actually understand what working families are going through in this country. They are struggling with how they are going to pay their bills.’
But a government source told the Daily Mail that Mr Johnson was considering announcing a single major tax cut this summer. The source added: ‘There is a view that it is just not tenable to leave everything until the autumn.
‘Yes, there’s going to be more help on energy, but it’s probably more likely than not that we will also have to do something on tax this summer.’
But Tory MPs yesterday stepped up pressure on the Chancellor to move faster and further in easing the record tax burden and Scottish Secretary Alister Jack called for immediate action.
He said: ‘What more I’d like to see done is a further tax cut because that’s how you get money into people’s pockets.’
‘Where we can act, we will’
FOR some time, the Daily Mail has urged our political leaders to return to belts-and-braces values to help those struggling with the cost of living squeeze.
Today it seems the Prime Minister has heeded the message – with a vision for a triple tax cut.
With inflation soaring above 9 per cent, putting more money in people’s pockets will help them with everything from heating their homes to putting food on the table.
The nuts and bolts of the plan? The Prime Minister is considering changes to Universal Credit to help more than three million people.
Emergency council tax cuts are on the table. And the Chancellor has vowed to trim company taxes to turbocharge investment.
Inflation, of course, is a global phenomenon, driven by Covid supply chain issues and the Ukraine war.
But tax cuts can not only help keep the wolf at bay but generate spending, growth and employment this country needs.