[1/2]Britain’s Chancellor of the Exchequer Jeremy Hunt attends the Britain’s Conservative Party annual conference in Manchester, Britain, on October 2, 2023. Portal/Hannah McKay acquires license rights
- Hunt can’t commit to tax cuts before the election
- Repeats Sunak’s mantra of ‘difficult decisions’
- Truss will put more pressure on the government
MANCHESTER, England, Oct 2 (Portal) – British Finance Minister Jeremy Hunt on Monday responded with cold water to growing calls for tax cuts within the ruling Conservative Party, saying he could not commit to an “inflationary” cut before the next election oblige.
Ahead of his speech at the party’s annual conference in the northern city of Manchester, Hunt planned to announce an increase in the minimum wage for workers over 23 from 10.42 pounds to at least 11 pounds ($13.42) an hour.
But his message was overshadowed by calls from senior Conservative MPs, including Prime Minister Rishi Sunak’s predecessor, for tax cuts to close the poll gap with the opposition Labor Party ahead of elections expected next year.
It was the latest row over the party’s direction under Sunak, who hopes to use the conference to revive his year-long premiership by showing he is not afraid to make tough decisions to try to to improve the situation of the people.
In a bid to temper the expectations of those pressuring the government to offer tax cuts to voters, Hunt told Times Radio: “I believe in tax cuts, but we don’t know at the moment whether that will be possible before the next election.”
He said any tax cuts this year would increase inflation and make it harder to meet Sunak’s January promise to halve inflation by the end of the year.
“Do we want to move to lower taxes as quickly as possible? Yes, but it means difficult decisions and we are prepared to make those difficult decisions,” Hunt told Sky News, adding that voters understood “how difficult these decisions are.” .
He also reiterated that he would look again at the welfare sanctions regime to make it more difficult for people to claim benefits, while refusing to take active steps to get a job, saying he wanted to treat other taxpayers “fairly.”
DEPARTMENTS
At a conference that also highlighted the government’s disagreements over tackling illegal immigration, Sunak is hoping for some sort of reset to mobilize a party heading for defeat in elections that must be held by January 2025.
He has narrowed the gap with Labor after announcing a weakening of climate policy to meet net zero targets, but many Conservative lawmakers and members in Manchester are resigned to losing and some ministers are using the conference to give their support Showing potential to replace him.
What hasn’t helped Sunak’s case among traditional Conservative low-tax advocates is a report from the Institute for Fiscal Studies think tank on Friday that showed tax revenues were likely to account for 37% of annual economic output by the time of the next election – Britain’s highest tax rate since at least the 1950s.
While the British government’s tax revenues are high by historical standards at 33.5% of gross domestic product in 2021, according to the OECD they are well below those of other large Western European countries, which are closer to 40%.
But for conservatives like Liz Truss, who was prime minister for a chaotic six weeks last year, it was a sign that the governing party had lost its fiscal responsibility.
She will speak just over an hour before Hunt takes the main stage, saying she wants the Conservatives to “be the party of business again” by cutting taxes and red tape.
“So before this year’s Autumn Statement, we must make the Conservative Party the party of business again by cutting corporation tax back to 19%,” she will say, according to excerpts from her speech.
Hunt’s response was blunt: “When I make my speech this afternoon I will have a very clear message for Liz Truss and indeed for the whole country.”
“There are no shortcuts. We need to make the tough decisions to make it easier for businesses to grow. We need to be much more efficient in the use of taxpayer money, including reforms to the welfare system.”
($1 = 0.8199 pounds)
Reporting by Alistair Smout, Elizabeth Piper and Andrew MacAskill; Additional reporting by Kylie MacLellan, Sachin Ravikumar and Sarah Young, editing by Emelia Sithole-Matarise and Catherine Evans
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