John Redwood demands Sunak halves corporation tax
Jeremy Hunt has left Tory MPs “dismayed” after it emerged he is once again ruling out significant tax cuts before the end of this year.
The Chancellor has reportedly told Treasury officials there will be no cuts to any of the main rates, though is continuing to dangle the promise of pre-election cuts as red meat for Tories.
Mr Hunt previously refused to rule out tax cuts in his autumn statement, expected in November, though has continually argued reducing inflation is the most important mission of the Government.
He is set to ask the Office for Budget Responsibility to begin writing its economic forecasts in the coming days, essentially meaning any announcements in the Autumn Statement will be based on the state of the economy as it is today.
Tory MPs told the i newspaper they would be “dismayed” if Mr Hunt refused to cut taxes, with former Cabinet minister David Jones saying it would be a “big disappointment”.
READ MORE: Tories demand tax cuts after figures show UK enjoyed ￡11 billion debt windfall
Mr Hunt has told Treasury Officials not to work on tax cuts (Image: Getty)
Sir James Duddridge added: “No tax cut in the autumn statement would not be a disappointment. It would be a disaster”.
The economy isn’t so gloomy as to automatically rule out tax cuts, however.
Last week it was revealed the UK had enjoyed an ￡11 billion boost to its fiscal headroom thanks to a big debt windfall.
The figures revealed that from April to June this year the Government borrowed ￡11.3 billion less than the OBR had forecast in March.
Senior economists said the news meant Mr Hunt does have room for tax cuts.
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David Jones says the move would be "hugely disappointing" (Image: Getty)
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The Taxpayer’s Alliance said the figures “give the government an opportunity to get serious about economic growth”.
"Families and businesses are struggling with falling living standards and a 70-year high tax burden, and they need to know that there is light at the end of the tunnel.
“The government should clamp down on wasteful spending to leave the room for growth-boosting tax cuts."
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Sir John Redwood said the Treasury now needs “a change of policy”, combining “selective reductions in public spending” with “selective tax cuts”.
He said such tax cuts would “boost the figures further by providing more revenue”, and criticised the OBR models that “do not capture the buoyancy of tax revenues”.
Mr Hunt previously said: “As inflation slows, it’s vital that we don’t alter our course and continue to act responsibly with the public finances. Only by sticking to our plan will we halve inflation, grow the economy and reduce debt”.
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