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Jeremy Hunt tonight risked Tory fury as he refused to commit to tax cuts ahead of the next general election. The Chancellor told ITV’s Peston show: “My job is to do the right thing for the economy and then people will see that they can trust the Conservatives to get the economy growing.
“That’s the electoral dividend – I’m not interested in playing games.
Mr Hunt said he had taken action in the Budget to “systematically” remove the barriers that stop people working, including extending access to childcare.
“So that is one of the big things that the business organisations like CBI have been asking for.
“That is a transformational change for our economy, because after the Brexit referendum there was a decision by the country that we aren’t going to fill our vacancies from unlimited, low-skilled migration and this is the way that we address it without doing that.”
But Mr Hunt risks the wrath of Conservative MPs as the tax burden is on course to be the highest since the Second World War.
He is already facing fury from senior Tories over a hike in corporation tax in today’s Budget from 19 percent to 25 percent.
Speaking in the Commons this afternoon, former Cabinet minister Jacob Rees-Mogg said: “So, we have a rise now in corporation tax, but we then sort of salami-slice it a bit with some capital allowances to pretend it’s not much of a rise. This is not a good approach to tax policy.
“The best approach to tax policy is low tax rates with few exclusions; we hear powerful arguments from the other side against tax avoidance, but this is setting up a tax avoidance scheme that companies are being asked to carry out because the Government thinks it may be a way businesses will spend money that’s approved by the Government.
“But, actually, who knows best how to spend that money? Businesses.”
Ex-home secretary Priti Patel urged the Government to keep the level of corporation tax “under review”.
She said: “Just on the issue of corporation tax, when it comes to the wider prospectus of the minimum rate of corporation tax … we know that the introduction of the minimum effective tax rate will be delayed in Washington and other countries, and I would just ask him again to think carefully about the timing of this. Why now?”
Thatcherite MP Sir John Redwood compared the UK’s approach to taxing businesses with the US and the Republic of Ireland, both of which he claimed have taken measures more likely to boost growth.
Ranil Jayawardena, who served in the cabinet during Liz Truss’ brief premiership and formed the Conservative Growth Group in January, also backed slashing the tax on business in future.
He told the Commons: “We should still seek to revisit corporation tax in the months and years ahead, because any increase in corporation tax will make us less competitive, reduce investment in the long run, stifle job creation. All of which are required for growth.”
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