Tory MPs have expressed dismay at claims by the Chancellor that tax cuts are unlikely to take place before the next election.
Jeremy Hunt, who is set to make a speech on the economy at the City of London’s Mansion House on Monday, has warned that he must “double down” on inflation ahead of the next election.
“We will not countenance tax cuts if they make the battle against inflation harder,” he told Financial Times. “If we were to pump billions of pounds of additional demand into the economy when inflation is already too high, that would mean fiscal policy working against monetary policy.”
But Tory MPs have said the Chancellor’s comments “won’t go down well” on the backbenches, as many are concerned it could damage their chances at the polls.
Speaking to i, one former minister warned that “the longer we delay tax cuts, the more likely it is that we will hand the next election to Labour.”
This was echoed by a backbench Tory MP, who said many colleagues would be dismayed by the Chancellor’s comments as they will have to “sell it to the electorate”.
One former Cabinet minister called the decision “bizarre”, and questioned why the government was offering tax-payed funded support to struggling families rather than reducing their tax burden.
“Whilst inflation should be tackled by offering higher savings rates to those with cash in the bank, hardworking families continue to feel the pinch, so it makes sense to let people simply keep more of their own money,” they added.
Financial Secretary to the Treasury Victoria Atkins said on Sunday that ministers would look at reducing taxes “as soon as we can” but that the Government’s priority was tackling high prices.
She told the BBC’s Sunday With Laura Kuenssberg programme: “We are Conservatives, we absolutely fundamentally believe in lower taxes.
“We want to be fiscally responsible, both the Prime Minister and the Chancellor have said that as soon as we can we will cut taxes.
She added that the UK currently does not “have the headroom at the moment to look at tax cuts”, but that once measures to reduce inflation take effect “then we are able to start having those conversations”.
The government is currently struggling to achieve its pledge to halve inflation, which currently stands at 8.7 per cent, to around 5 per cent by the end of the year.
Mr Hunt admitted to The Financial Times that achieving that promise was “going to be more challenging than we thought”.
“We will not countenance tax cuts if they make the battle against inflation harder,” he said.
“If we were to pump billions of pounds of additional demand into the economy when inflation is already too high, that would mean fiscal policy working against monetary policy.”
