Hopes of an imminent tax cut are dashed as Treasury minister Victoria Atkins says the government does not have the ‘headroom’ to reduce the burden on taxpayers
- Victoria Atkins said the government does not have the ‘headroom’ for tax cuts
- She told Laura Kuenssberg the government’s main priority is reducing inflation
Hopes of an imminent tax cut were dashed by a Treasury minister yesterday.
Victoria Atkins insisted the Government did not have the ‘headroom’ to reduce the burden on hard-pressed individuals and businesses.
She said that ministers had to be ‘fiscally responsible’ and that the number one priority was tackling inflation.
The message will come as a blow to the dozens of Conservative MPs who have been calling on the party to lower taxes from their 70-year high, both to improve its chances in next year’s election and to boost the economy.
In the latest demand, the Conservative Growth Group led by allies of Liz Truss has urged reform of the ‘unfair’ income tax system to base it on families rather than individuals.
Treasury minister Victoria Atkins (left) told Laura Kuenssberg (right) the government lacks the ‘headroom’ for tax cuts
The Treasury is also under pressure to help struggling families by stopping the Bank of England creating ‘unlimited quantities’ of new money.
However in his Mansion House speech in the City of London tonight, Chancellor Jeremy Hunt is expected to focus instead on helping big businesses by getting pensions firms to invest in them.
Financial Secretary to the Treasury Ms Atkins was asked by the BBC’s Laura Kuenssberg repeatedly yesterday if voters and her colleagues should forget about tax cuts any time soon.
She insisted: ‘We are Conservatives, we absolutely fundamentally believe in lower taxes. I want people to be able to keep more of their hard-earned earnings in their pockets and purses.
‘Both the Prime Minister and the Chancellor have said that as soon as we can we will cut taxes, but we do have to be fiscally responsible about this.’
Asked about the timing of any reductions, she replied: ‘Our priority, as Jeremy set out yesterday, has to be tackling inflation.
‘That is the quickest way that we can help people make their wage packets go further.
Victoria Atkins said the UK’s Chancellor of the Exchequer Jeremy Hunt (pictured) is currently prioritising efforts to tackle inflation
‘And so this is why the Prime Minister – who was talking about this by the way two years before anyone else – that’s why he’s made it his number one priority out of his five priorities.’
Pressed on whether tax cuts are off the agenda for the foreseeable future, Ms Atkins admitted: ‘So as Jeremy the Chancellor said yesterday we are having to tackle inflation, that has to be our priority.
‘We do not have the headroom at the moment to look at tax cuts. But… as soon as we have taken the measures that we are taking to reduce inflation, then we will be able to start having those conversations.’
In a separate interview with Sky News, the minister highlighted that the UK had spent £400billion in Covid-era support for the NHS and businesses, £94billion on help for people struggling with the cost of living, and is paying £120billion a year on debt interest.
But she had to be asked nine times on Times Radio what the Government’s target was for the inflation rate by the end of the year.
Eventually presenter Adam Boulton asked: ‘I think the figure is 5.1 per cent isn’t it?’
She replied: ‘We set that target of halving it and we are fully committed to it.’
The Treasury minister said Prime Minister Rishi Sunak (pictured) is willing to cut taxes as soon as it is fiscally responsible to do so
Meanwhile the Chancellor is also facing calls to remove the Bank of England’s power to create ‘unlimited quantities’ of new money.
A new group called the Honest Money Initiative, being launched today in the House of Lords, is demanding an end to quantitative easing, which it calls ‘magic money creation’.
Last night former Brexit negotiator Lord Frost said: ‘The best thing government can do to improve hard-working families’ everyday lives is learn to live within its means – just like everyone else has had to.
Money printing and a long period of super-low interest rates has been at the root of the country’s move leftwards. It’s time to change the Bank’s mandate so we can start to turn the tide.’
A former Cabinet minister told the Mail: ‘Without tax cuts soon, we can forget any Conservative being in government to provide the long-term economic plan that Britain needs.
‘Instead of justifying high taxes – one of the worst ways to tackle the cost of living – government ministers should be pushing banks to offer higher savings rates which would bring down inflation and help savers.’
Source: Read Full Article
