John­son could rip up Javid rules to cut taxes

Prime Min­is­ter aims to boost spend­ing with cash for in­fras­truc­ture, po­lice and schools in Bud­get

The Daily Telegraph - - Front page - By and

Christo­pher Hope,

Harry Yorke Anna Mikhailova BORIS JOHN­SON is con­sid­er­ing rip­ping up Sa­jid Javid’s fis­cal rules to al­low for more spend­ing and tax cuts to boost the econ­omy af­ter Brexit.

No 10 sig­nalled yes­ter­day that the spend­ing rules set out in the Con­ser­va­tives’ gen­eral elec­tion man­i­festo could be loos­ened as the Prime Min­is­ter at­tempts to lift the econ­omy.

It came amid spec­u­la­tion that Rishi Su­nak, the new Chancellor, will back Mr John­son on VAT re­form and in­vest­ing in free ports. The Gov­ern­ment this week be­gan a con­sul­ta­tion on the eco­nomic zones, which runs un­til April.

The Bud­get may in­clude stamp duty cuts for main homes, which Mr John­son sup­ports, and cuts to high street busi­ness rates.

The Tory man­i­festo com­mit­ted the party to fund day-to-day spend­ing with­out bor­row­ing, al­though it did not set a time frame for the pledge.

The Gov­ern­ment is plan­ning to spend an ex­tra £20bil­lion a year on in­vest­ment, but a looser def­i­ni­tion – such as “in­vest­ing” in teach­ers’ salaries – could al­low cur­rent spend­ing to rise.

Pressed re­peat­edly over whether Mr Su­nak would stick to these rules, a No10 spokesman only said that they would be con­firmed at the Bud­get next month. “We will con­tinue to have a clear fis­cal frame­work,” the spokesman said. “The Chancellor is busy get­ting down to work and that will con­tinue through the week­end as prepa­ra­tions for the Bud­get con­tinue at pace.”

A se­nior Down­ing Street source later re­fused to say the fis­cal rules re­mained un­changed, adding: “We were elected on our man­i­festo, we are go­ing to de­liver our man­i­festo and the PM is com­mit­ted to his man­i­festo.”

The Prime Min­is­ter is ex­pected to use the Bud­get to an­nounce large-scale in­fras­truc­ture spend­ing, to fur­ther boost bud­gets for schools, po­lice and the NHS and to set out how he in­tends to tackle the so­cial care cri­sis.

Mr John­son told his Cabi­net at its first meet­ing since the reshuf­fle that “the Gov­ern­ment has a re­spon­si­bil­ity to level up and unite the coun­try”.

Mr Su­nak re­minded min­is­ters at the meet­ing that their de­part­ments needed to find 5 per cent sav­ings so money could be spent else­where.

Yes­ter­day’s meet­ing also ap­proved plans for a new points-based im­mi­gra­tion sys­tem un­der which only peo­ple with “global tal­ent” such as mu­si­cians and ac­tors would be en­ti­tled to come to the UK with­out a job of­fer.

The pro­pos­als, to be pub­lished late next week, will pave the way for an in­crease in skilled mi­grants with the nec­es­sary points com­ing to the UK but will abol­ish the route for un­skilled

mi­grants from Jan 1 next year. Mr John­son fin­ished his reshuf­fle with con­fir­ma­tion of another 20 ap­point­ments, in­clud­ing Jesse Nor­man, an in­fras­truc­ture ex­pert who kept his role in the Trea­sury as Fi­nan­cial Sec­re­tary. Some min­is­te­rial aides were sacked and oth­ers moved be­tween de­part­ments.

In other de­vel­op­ments, newly ap­pointed sec­re­taries of state were to re­ceive spe­cific instructio­ns from Mu­nira Mirza, di­rec­tor of the No10 pol­icy unit, on their key pri­or­i­ties. It also emerged that a full merger of the aid depart­ment into the For­eign Of­fice will go ahead in the au­tumn with se­nior gov­ern­ment sources sug­gest­ing Oc­to­ber.

The Chancellor is un­likely to op­pose

Mr John­son’s plans to turn on the taps on spend­ing. Mr Su­nak has said higher lev­els of debt are more man­age­able due to low in­ter­est rates and re­cently pri­vately called for a boost in in­vest­ment to aid the “lev­el­ling-up” agenda.

They are also aligned on free ports, with Mr Su­nak in 2016 back­ing US free trade zones and spe­cial eco­nomic zones in China, which of­fer lower taxes, less reg­u­la­tion and looser plan­ning rules.

Else­where, Mr Su­nak backed VAT cuts on goods such as san­i­tary prod­ucts and showed he was keen to levy taxes on the well-off. In 2017 he said it was “en­tirely right” that ad­di­tional stamp duty tax was levied on peo­ple who sell their se­cond homes.

No10 be­gan its takeover of No11 yes­ter­day, with two of Mr John­son’s se­nior aides mov­ing into the Trea­sury to over­see the tran­si­tion. Mr Su­nak will be sup­ported in the run-up to the Bud­get by aides brought in from White­hall, as a joint “eco­nomic unit” is es­tab­lished.

Robert Jen­rick, the Hous­ing Sec­re­tary, de­fended the Prime Min­is­ter’s push for greater con­trol of the Trea­sury, say­ing: “It is right that there’s a co­or­di­nated eco­nomic func­tion which will en­able them to de­liver the prom­ises made in the gen­eral elec­tion.”

There was con­cern the Gov­ern­ment would not say if the Bud­get would go ahead on March 11. Mel Stride, the Trea­sury com­mit­tee chair­man, warned any de­lay would “tele­graph un­cer­tainty”. Ad­di­tional re­port­ing: Tony Diver

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.