Rishi Sunak says tax cuts are a fairy tale, but he is chasing a Sleeping Beauty fantasy
TIMES are tough. We need a bold plan to tackle the cost of living and get growth going. I have heard my friend Rishi Sunak argue that this is not the time to cut taxes, despite people facing the heaviest burden since the 1940s.
With all due respect to the former chancellor, he is acting as if nothing has changed since the spending review last autumn. I am proud to have worked with him closely on it as chief secretary to the Treasury, but accept the situation has changed fundamentally.
The true fairytale lies in pretending we can awake like Sleeping Beauty and expect the world to be the same as it was. Back then, we had no idea about Russia’s invasion of Ukraine and the shockwaves it would send through the global economy. It has pushed food and energy prices sky high and left us with the highest inflation in 40 years.
Rishi and I were also delivering the autumn Spending Review within the spending parameters and commitments set, perfectly reasonably, by Boris Johnson as our prime minister.
We can and should make new choices with a new leader. Under the clear and decisive leadership of Liz Truss, we would take a different approach to get our economy back on track while delivering on our core commitments to the British people such as levelling up, and still bringing debt down in the medium term.
As prime minister, Liz would take immediate action to put more money back in people’s pockets by reversing the National Insurance increase that came in this April. We would cut corporation tax back to 19 per cent in order to unleash a wave of business investment and confidence in Britain. We would also introduce a moratorium on energy levies to bring down average bills.
To govern is to choose, and we will not duck the choices required. We will immediately kick off a comprehensive long-term Spending Review in order to maximise efficiency with taxpayers’ money and secure a slimmer, more efficient state. As part of this, we would put the Covid debt on a longer-term footing.
We would borrow only in a fiscally prudent manner, with as firm a grip on public spending as Liz had when she was herself at the Treasury. By taking this approach, we would create room for targeted tax cuts.
Clearly, inflation imposes costs on the government but it does also offer some scope for different decisions. The Centre for Economics and Business Research estimates that net tax receipts for 2024/2025 will come in about £60bn more than previously estimated.
Liz has a clear plan, built on fundamental Conservative principles such as free enterprise, to transform our economy into a high-growth dynamo over the next ten years. She is a proven leader who has delivered results across six departments, from striking dozens of trade deals with major markets like Australia and Japan to facing down Vladimir Putin over his appalling war in Ukraine.
Under her leadership, we would seize the benefits of Brexit by overhauling senseless regulation. This includes the EU’s Solvency II rules which have tied the hands of insurers for too long. We would also liberate more of our pension funds to be able to invest in high-tech startups.
By uniting under Liz’s leadership, we will work to deliver her vision of an aspiration nation where people from all parts and backgrounds have the opportunity to succeed. We are determined to get the economy firing on all cylinders, with the private sector growing faster than the public sector.
Together, we can deliver this for the benefit of people in Canada and far beyond, reaching right across our country.