UK Prime Minister Rishi Sunak said on Thursday the government could not afford any immediate tax cuts stating people are ‘not idiots’ and understand what is unaffordable.
The decision seems to give way to new conflict with Conservative MPs who have been harping on tax cuts in the spring budget on the back of improving economic forecasts and as a way to increase growth, reported the publication, Guardian.
Talking about tax cuts while speaking in Lancashire, the PM 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.”
Why are tax cuts not being considered?
The comment comes after Treasury insiders reportedly said that Jeremy Hunt, the Chancellor is aiming for a "slimmed down" Budget in March with no immediate tax cuts.
It is because pushing growth, bringing down inflation, and curbing national debt remains the government’s top priorities as it aims to restore confidence among business and the public. It is only then that tax cuts can be considered.
Meanwhile, MPs who agreed with Liz Truss’s tax-cutting agenda are putting pressure on the Treasury to opt for more radical plans. The Truss loyalists claim there are stronger signs of economic recovery including the current reduction in global energy prices and the forecast that UK inflation will fall considerably this year.
Explaining his stance, Sunak said the pandemic and the war in Ukraine had left the state of public finances “not where it needs to be”. He further said: “Trust me, that’s what I’m going to do for you this year, that’s what we’re going to do while I’m prime minister and if we do those things we will be able to cut your taxes.”
Meanwhile, the decision didn’t go well with conservative MPs who reacted furiously as there would be no consideration of early tax cuts.