Chancellor Jeremy Hunt has refused to commit to tax cuts ahead of the next election, despite growing calls from inside his party.
His cabinet colleague Michael Gove told Sky News on Sunday that he wanted to see “the tax burden reduced” by the time the public goes to the polls.
But speaking to Kay Burley this morning, Mr Hunt said “big tax cuts now… would be inflationary”, and “nothing is going to compromise the battle” to bring that figure down.
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Asked if we could see a headline tax cut before the next election, he said: “It’s very difficult to see having that kind of tax cut this year.”
The comments came ahead of the chancellor’s speech to the Conservative Party conference in Manchester this afternoon, where he is due to announce a rise in the living wage and stronger benefits sanctions.
But it also came before the return of former prime minister Liz Truss to the annual event, where she will speak at the Great British Growth Rally to demand a cut in corporation tax – a policy that was part of her disastrous mini-budget just 12 months ago.
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Some Conservative backbenchers have long called for tax cuts from Number 11 as the current burden on households is at a 70-year high.
But the row reignited on the first day of this year’s conference after Mr Gove’s remarks to Sky News – followed by Prime Minister Rishi Sunak’s refusal to sign up for the pledge.
Pushed on whether there would be tax cuts ahead of the next election, Mr Hunt said: “I would love to see tax cuts for working people and obviously tax cuts for everyone.
“[However], if we gave big tax cuts now, that would put more money in people’s pockets [but] that would be inflationary. And right now, we are in a big battle which is succeeding to bring down inflation.”
The chancellor echoed the comments from Mr Sunak that “the fastest thing we can do” to help households is to reduce inflation, before adding: “Do we want to move to lower taxes as soon as we can? Yes, but it means difficult decisions and we’re prepared to take those difficult decisions.”
But like the prime minister, he would not commit to a timetable, saying he did not have “a crystal ball” and it would be wrong to “make a prediction one way or the other”.
“I can’t tell you what the state of the economy is going to be going forward,” said Mr Hunt. “What I can say is that it’s very difficult to see having that kind of tax cut this year.
“Public finances don’t allow that. Our interest payments are predicted to be much higher than at the spring budget and it would be inflationary.
“But if you’re asking me, is it something that I’m willing to put us on a path to doing, I do want us to have lower taxes and I’m prepared to take the difficult decisions to make that happen”.
