Rishi Sunak under increased pressure to cut taxes
Rishi Sunak heckled by passerby over his heating bill
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Rishi Sunak is under increased pressure to lower UK taxes as the country has “turned a corner” on inflation. Business leaders and Tory MPs have stepped up calls to cut record high taxes at the next Budget, although the PM has not given any indication that he is willing to do so.
He suggested on Wednesday that only “idiots” would not understand his refusal to cut taxes with inflation still high and the country suffering from the after effects of COVID-19 and high energy prices.
However, Bank of England governor Andrew Bailey said the UK had “turned a corner” on the cost of living crisis as inflation fell to 10.5 percent.
While this is still high, he added that he now expected it to drop “quite rapidly this year”.
He claimed the UK was set for an “easier path” out of recession than had been predicted, with energy prices “starting to come off and gas prices quite a lot actually” over the past few months.
He added that while this “isn’t actually yet feeding through” into inflation “it will do”.
Analysts Cornwall Insight even predicted that average energy bills could dip below £2,000 by this autumn.
According to the Office for Budget Responsibility the November Budget will raise the tax burden to 47 percent of GDP, an increase on the 39 percent before the pandemic and the most since 1945.
Chancellor Jeremy Hunt is reportedly not looking to implement tax cuts while he focuses on getting inflation down.
Levelling-Up Secretary Michael Gove also reiterated the point, saying: “The best tax cut people can have is to cut inflation.”
During a visit to Morecambe Mr Sunak insisted that he did want to cut taxes but that it would not be the wisest time to do so.
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He said: “I’m a Conservative, I want to cut your taxes – I wish I could do that tomorrow quite frankly but the reason we can’t is because of all the reasons you know.
“You’re not idiots, you know what’s happened. We had a massive pandemic for two years, we had to shut the country down, do a bunch of extraordinary things that didn’t come cheap.
“Now we’ve got this war going on which is having an enormous impact on inflation and interest rates.”
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