Javid mulls tax cut for middle earners

TAXES could be cut for middle-class earners in the Budget this autumn, Sajid Javid has said.

The Chancellor also hinted that billions of pounds could be borrowed to spend on infrastructure.

In an interview with The Times, Mr Javid gave a clear hint that he is looking at cutting tax rates if it raised more money for the Treasury.

George Osborne, one of his predecessors in 11 Downing Street, justified cutting the additional rate threshold on incomes over £150,000 from 50p to 45p in 2013 by saying that it would bring in more cash for the Treasury.

Mr Javid said: “Taxes should be efficient. We want to set them at a rate where we are trying to maximise revenue, and that doesn’t always mean that you have the highest tax rate possible.

“Generally I want to see lower taxes, but at a level that is going to pay for the public services.”

Pressed about another proposed tax change – making sellers instead of buyers liable for stamp duty – the Chancellor said: “I’m looking at various options. I’m a low-tax guy. I want to see simpler taxes.” Mr Javid, who proposed borrowing to pay for a £100billion infrastructure fund over five years during the Tory leadership campaign, also suggested he may borrow more.

He said: “When we have the Budget, I will be thinking about whether we need to make any changes to the fiscal rules. When you’ve got some of the lowest rates on government debt this country has ever seen I wouldn’t be doing my job if I wasn’t thinking seriously about how do we use [that opportunity].”

He added he would not risk spending heavily like John Mcdonnell, the shadow chancellor. He said: “He’d call anything ‘invested in infrastructure’ just so he can get his way on spending, and the spending would be completely out of control with Labour.”

Mr Javid also said the Government was backing Mr Osborne to be the next head of the International Monetary Fund. “There’s a number of discussions going on, and I think that George would make an excellent, absolutely superb head of the IMF,” he said.

“But as you’ll know these processes are never straightforward.”

Mr Javid has confirmed he will announce the one-year spending round on Sept 11, but is yet to say if the Budget will come before or after the UK is scheduled to leave the EU on Oct 31. “I’m weighing up the options,” he said.

At the weekend Mr Javid moved with his children into the flat above 10 Downing Street to which he is entitled as Chancellor.

The only member of the household regretting the move might be the family’s dog, Bailey, a cavapoo, which has had a few unfortunate encounters with Larry, the Downing Street cat.

He said: “Larry seems a bit vicious to dogs. They’re going to have to get to know each other a bit more.”