Gove: I’ll scrapVAT after Brexit
Cabinet minister unveils radical manifesto after leadership bid hit by cocaine admission
MICHAEL GOVE has pledged to replace VAT with a “lower, simpler” alternative and cut business rates if he is elected Conservative leader.
Unveiling a radical economic manifesto in The Sunday Telegraph, the Environment Secretary pledges to take advantage of Brexit to scrap the 20 per cent tax currently levied on goods and services as a result of EU rules, in a move that could cut the cost of living.
Sources also indicated that he would halt construction of the £56billion High Speed 2 rail line in order to review whether it represented “proper value for money”, amid concerns about its spiralling costs.
His intervention, which comes ahead of tomorrow’s formal deadline for the nomination of candidates to succeed Theresa May, is likely to be seen as a dramatic attempt by Mr Gove to shift focus back to his policy plans after a new book revealed that he had taken cocaine in his 30s. Confirming the claim yesterday, Mr Gove said: “I did take drugs. It is something I deeply regret.”
Yesterday, following the revelations, Matt Hancock, the Health Secretary, and Andrea Leadsom, the former leader of the Commons, admitted they had smoked cannabis at university.
Mr Gove’s plans to scrap VAT – a tax required as part of membership of the EU’s single market – bolsters his insistence that he would seek a loose relationship with Brussels after Brexit. The proposals will be seen as an attempt to defy claims by some Brexiteers that he could attempt to keep the UK closely tied to the bloc.
Currently the majority of Leavers to have publicly declared support for an individual candidate are backing Boris Johnson, the former foreign secretary, or Dominic Raab, the former Brexit secretary, who both take a harder line on the UK’s exit from the EU.
Mr Gove also commits himself to introducing an Australian-style, pointsbased immigration system – a key pledge of the official Leave campaign, of which he was a figurehead, along with Mr Johnson. Sources said he wanted to “seize the opportunities of Brexit”.
The Environment Secretary declares in the article that as prime minister he would ensure that Britain is “the best place in the world to live, learn, raise a family, achieve your potential, and start and run a business”.
He pledges to take on Jeremy Corbyn’s “Marxist message” with a “smart, pro-business economic plan” designed to increase investment, productivity and wages.
“This would mean reducing the regulations which hold business back, cutting and reforming taxes – such as business rates – which put pressure on small businesses and undermine our high streets, using the opportunity of life outside the EU to look to replace VAT with a lower, simpler sales tax, ensuring our business tax structure is the most competitive in the G20 and reducing marginal tax rates for the poorest families to reward work.”
A campaign source declined to be drawn on a proposed rate for the sales tax envisioned by Mr Gove, but said that he believed the current system was too bureaucratic for traders and that taxes were too high.
Expanding on Mr Gove’s pledge to cut and reform business rates, the source added: “Our instinct is to extend the current relief that the Chancellor has introduced, in time and in scope, while we do a much bigger review of the way businesses are taxed, particularly retail businesses, with a review to protecting high streets.”
Mr Gove describes how his father’s work as a small businessman, running a family fish processing firm in Aberdeen, showed him from a young age “what enterprise can achieve”.
“His hard work didn’t just provide us with a loving home, he also created jobs, specifically giving young people who had grown up in care a chance to succeed. Business is a powerful force.”
His article continues: “A new world of work requires a new approach to smart spending. I’d ensure we invested more nimbly in infrastructure, properly prioritising spending on the basis
‘Britain must be the best place in the world to live, learn, raise a family and achieve your potential’
of the new growth it would create. That would allow us to improve transport links – that means bus and rail services outside of the South East, in the North, the Midlands and beyond.”
The source said Mr Gove would review HS2 “to see if we’re getting proper value for money and to ensure the North benefits first. We need to improve rail capacity and connectivity, especially in the north of England but there are tough questions we need to ask about routes and where we frontload investment.”
The source cited a recent report by the Lords’ Economic Affairs committee whose members were “far from convinced” HS2 would be delivered on budget.
“Lord Forsyth [the committee chairman] did a very thorough review of HS2, which has some important messages,” the source said. “He recommended that we ‘should press the pause button’ while we do a ‘new appraisal’. We need to focus on improving transport links at regional and subregional level.”
Mr Gove’s plans amount to the most radical economic proposals by any of the frontrunners in the leadership campaign to date. Mr Raab has pledged to cut the basic rate of income tax by 5p over a five year period. Writing the The Telegraph last year, Mr Johnson called on Mrs May to cut income tax, stamp duty and capital gains tax to boost Britain’s economy.
Mr Gove concludes: “While our next leader must be someone prepared to deliver Brexit, they must also be ready to lead one of the world’s greatest economies to an even greater future. I want to get all of Britain working again, every proud community vibrant and growing, every individual free to become author of their own life story.”