Wednesday, February 21

Tories urge PM to avoid tax rises


 

 

Boris Johnson has been urged by Tory MPs to resist attempts by the Treasury to raise taxes, after a minister refused to rule out hikes in the next Budget.

Reports emerged on Sunday that Rishi Sunak, the Chancellor, was considering a £20 billion tax increase in the autumn to deal with the cost of the coronavirus crisis.

Tax rises could include corporation tax and capital gains tax, while pension tax relief could be cut, according to newspaper reports.

Marcus Fysh, a Tory backbencher, said tax increases would be the wrong response to the coronavirus crisis.

Boris Johnson is right to resist them if the Sunday papers have the story right, he said. We need to help the economy not strangle it. These mixed messages are in themselves damaging and must stop.

John Redwood, a former Cabinet minister, said: You cannot tax your way to faster growth and more prosperity. We need policies to promote more jobs and activity to get the deficit down.

In a radio interview on Sunday morning, Stephen Barclay, the Chief Secretary to the Treasury, refused to rule out rises and insisted such issues were a matter for the Budget.

Treasury ministers don’t get into what a Budget will or will not do, he told Times Radio. And particularly on tax measures ahead of that, that’s for the Chancellor, the Budget.

Mr Sunak is considering hiking corporation tax from 19 per cent to 24 per cent in order to boost revenue by £12 billion next year, it was suggested.

Capital gains tax might also be paid at the same rate as income tax, under the ideas reportedly being looked at, while the international development budget could also be caught up in Treasury reappraisals.

The aid budget has already been cut by £2.9 billion from £15.8 billion this year, due to the contraction in the economy caused by the Covid-19 outbreak.