Boris Johnson resists pressure to cut taxes as economy collapses closer to recession

But there is no guarantee that the price increase, caused by supply problems with the Covid blockade and aggravated by the Russian invasion of Ukraine, will not continue for longer than expected. Earlier forecasts from the Bank of England predicted that inflation would fall this year.

David Davis, a Conservative MP and former Brexit secretary, dismissed the argument that tax cuts should wait until inflation starts to fall.

Davis told The Telegraph: “There’s a strange new argument that taxes are somehow a way to beat inflation. High taxes don’t beat inflation; it makes the impact on the average family more miserable.

“Secondly, we will face stagnation, not inflation. The best way to deal with this is to increase the growth rate, which is another argument for reducing taxes. Tax cuts should be arrive before inflation rises “.

The Prime Minister repeatedly spoke of his determination to cut taxes last week as he sought the support of Conservative MPs ahead of a vote of confidence in his leadership.

In a letter to all Conservative MPs ahead of the vote, Johnson said “you can’t tax your path to growth” and “of course, we’ll devote all our energy to reducing … the tax bill.”

He made similar comments in a face-to-face address to the 1922 Tory Committee of Deputies. Johnson ended up winning the Conservative MP’s censure vote by 211 votes to 148.

The prime minister then used a reshuffle speech on Thursday to describe the tax burden – which will reach its peak in 70 years – as “aberration”, and said he wanted a reduction “sooner” rather than “late”. “.

However, Johnson has declined to name a single new tax cut he is considering.

“Won’t the big tax hike make things worse?”

Sir John Redwood, a Conservative MP and former Welsh secretary, argued in the House of Commons that a tax cut could help those whose incomes have been undermined by rising prices.

Sir John asked: “Why is the UK government the only government in an advanced country that makes a huge increase in the tax burden and the next one at exactly the same time when there is a much-needed monetary tightening to control the inflation and a big impact on the net income of this inflation itself? Won’t the big tax hike make things worse and slow down the economy too much? “

Separately, Anthony Mangnall, the Conservative MP for Totnes, warned that low wages were making fishermen out of business.

He said: “Right now, Brixham fishermen are deciding to lift their boats due to a daily average of £ 32 for all-day work. If we don’t intervene now, our fishermen across the UK will fix it “.

No new tax decisions are expected until this fall’s budget.

Ministers point out that raising national insurance thresholds will begin next month, in a policy that will reduce taxes on millions of households.

UK reform is committed to reducing taxes

Meanwhile, Reform UK, which is led by Richard Tice and was originally founded as the Brexit Party, announced on Monday a stimulus plan that it said would provide an economic stimulus of £ 74 billion.

Accusing Mr Sunak of a “Corbyn solution” and “classical socialist measures”, Reform pledged to reduce income tax on Britons earning less than £ 20,000 a year, eliminating VAT on energy bills, reduce “green” environmental taxes and reduce fuel tax by 20 pence. per liter.

While the Brexit Party resigned with 317 seats won by the Conservatives in the 2019 general election, Reform is running candidates in both the Wakefield by-elections and Tiverton and Honiton next week.

Leave a Comment

Your email address will not be published. Required fields are marked *