12 June 2022

Second Cabinet minister backs earlier tax cut ‘when we can afford it’

12 June 2022

Another Cabinet minister has said he would support bringing forward income tax cuts in certain circumstances, as the Prime Minister remains under pressure to lower the burden facing families.

Northern Ireland Secretary Brandon Lewis said he would back the move “when we can afford to do it”, after Health Secretary Sajid Javid said the reduction should be fast-tracked to next year if possible.

Mr Lewis said the Government must be “prudent” with taxpayers’ money, as he warned against saddling the next generation with more debt.

In March, Chancellor Rishi Sunak pledged to cut the basic rate of income tax from 20p to 19p in the pound before the end of the current parliament, in 2024.

He said this was “fully costed”, and represented a “£5 billion tax cut for over 30 million people”.

Asked if the reduction should be brought forward, Mr Lewis told the BBC’s Sunday Morning programme: “We all want to see a low-tax economy, the Chancellor, the Prime Minister, I think all of us as Conservatives, I certainly want to see a low-tax economy as quickly as we possibly can.

“That encourages growth from businesses, it means more people have more money in their pockets to spend.”

Chancellor Rishi Sunak has pledged to cut the basic rate of income tax from 20p to 19p in the pound (Jonathan Brady/PA) (PA Wire)

Pressed again on whether he would want the cut to come sooner, he said: “I’d only want it to come forward when we can afford to do it.

“We cannot go and burden the next generation with more debt that they then have to pay the interest on. We’ve got to be fiscally sensible. That’s the tough decisions for Government.

“We’ve never shied away from that and I think it’s right that we get that balance. It’s a careful balance and I know it’s one the Chancellor and the Prime Minister are determined to get right.”

Mr Lewis also told Sky News’ Sophy Ridge on Sunday he thinks “lower tax is good”, but refused to be drawn on what cuts he might like to see.

He said: “I’m not going to prejudge the Chancellor… I’m never going to prejudge the difficult and complicated fiscal decisions the Chancellor has to make.

“Even before this week the Chancellor and the Prime Minister were clear that as soon as the fiscal situation allows – we’ve got to be very sensible about that, we’re managing public money after all – we want to see tax cuts, and the Chancellor wants to bring tax cuts in so more people have more money in their pocket to spend how they know they can spend it best.”

It comes after Mr Javid suggested the Government’s planned income tax cut should be brought forward to next year, if circumstances allow.

We cannot go and burden the next generation with more debt that they then have to pay the interest on

He told The Times the “best way” to finance public services is to have a “dynamic, low-tax economy that generates growth”.

He added: “That growth will naturally lead to rising revenues for the state that can fund the services.

“I’m a low-tax Tory – it’s one of the reasons I’m a Conservative and I want to see a small state that focuses on delivery of the things that really matter. And I want to see taxes as low as possible.”

Labour’s shadow chancellor said her party would cut the national insurance rise “right now” if it were in government, instead of focusing on income tax cuts.

Rachel Reeves told the BBC’s Sunday Morning: “The thing that we should be doing right now is reversing that national insurance increase.

“That would be my priority if I was chancellor today because it is taking money out of people’s pockets.

“The Government have got this sort of hokey-cokey where they are increasing national insurance but say they are going to reduce income tax.

Labour’s shadow chancellor said her party would cut the national insurance rise ‘right now’ if it were in government (Yui Mok/PA) (PA Wire)

“National insurance is a tax only on the income that you get through going out to work, that is why it is such a damaging tax increase right in the middle of a cost-of-living crisis.”

Ms Reeves said Labour has plans for a “stronger and more secure economy so we don’t just lurch from crisis to crisis”.

In an attempt to set his premiership back on track in the wake of a bruising confidence vote, the Prime Minister used a keynote speech on Thursday to reaffirm his commitment to cut taxes and set out plans to extend the right-to-buy.

Speaking in Blackpool, he said he wants to reduce the tax burden sooner rather than later and slash the size of the state.

But he later refused to give further details of his tax-cutting plans, saying: “On what Rishi (Sunak) and I are talking about on fiscal measures, you are just going to have to contain your impatience there.”

Mr Johnson said that the Government is “strongly inclined to stimulate further growth, further productivity with tax cuts as and when they become sensible”.

He added: “The cost of housing is a big chunk of expenditure, transport is a big chunk, childcare’s a big chunk, energy is an ever-growing chunk, but tax is the biggest of all and we certainly aim to get that down.”

Former minister Jake Berry, who chairs the Northern Research Group of Tory MPs, told The Telegraph that both the Chancellor and Prime Minister now “have the opportunity for a fresh start”, as he argued in favour of tax cuts to drive economic growth.

In an interview published on Saturday, he said “the wind of change blows from the north”, adding: “If you fail to recognise that cold breath on your face, then political annihilation lies ahead. Just ask the Labour Party who took the North for granted for decades and have all been wiped out in their heartlands.”

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