Jeremy Hunt, Britain’s Chancellor of the Exchequer, speaks on the second day of the the Conservative Party Conference on October 02, 2023 in Manchester, England.
Christopher Furlong | Getty Images News | Getty Images
MANCHESTER, ENGLAND — U.K. Finance Minister Jeremy Hunt on Monday ruled out tax cuts in the short-term, arguing that to reduce them now would be inflationary.
“Right now we’re focused on bringing down inflation,“ Hunt said on the second day of the Conservative Party Conference currently underway in Manchester, England. Hunt said on the second day of the Conservative Party Conference currently underway in Manchester, England. “Now we must follow through on it, as Margaret Thatcher did so many years ago. Hunt has said that tax cuts were “virtually unaffordable” and only possible if the government made “difficult choices”. The comments are a continuation from last year, when Hunt was appointed to stabilize the ship after Liz Truss delivered a cataclysmic budget. His words are in contrast to the calls from the Conservative Party for tax cuts before the General Election, which will be held next year. The Tories will face a difficult battle with the Labour Party. She called for the chancellor’s to reduce corporation tax to 19%, from its current 25%. “If we can get it even lower, that would be better.” Hunt announced a number of policies to help refocus the discussion, including a promise to increase the national living wages to PS11 per hour ($13.40) from PS10.42. This move is in line with a manifesto pledge to raise pay for those who are the lowest-paid. “Because, if you put in the work, a Conservative Government will always be there for you. The move is expected to be part of wider plans due to be announced next month in order for more people into work. The move is expected to form part of wider plans due to be announced next month to get more people into work.
Additionally, he said he would freeze the expansion of the civil service and implement a plan to reduce staff numbers to pre-pandemic levels.
Fight against inflation
British Prime Minister Rishi Sunak faced flack as the conference kicked off Sunday after telling the BBC that reducing inflation was the best tax cut he could offer.
“Inflation is a tax. He said that inflation is a tax on the poorest of the poor. Inflation — the rate at which the cost of goods and services rise — is not a tax, though it can function as such, with higher prices eating into people’s spending power.
Hunt sought to clarify the prime minister’s comments Monday, saying that reducing inflation would be a “boost to incomes,” ensuring that take-home pay is higher than it would be otherwise.
Sunak has positioned halving inflation to around 5% as one of his key priorities for 2023. Inflation in the U.K. fell to 6.7% as of August, which is lower than the 7% predicted by economists. This suggests that the rapid pace of price increases may be slowing. Britain is no longer the worst performer in the G7, ranking similar to France and stronger than Germany.
“Don’t bet against Britain,” Hunt said, referencing the ONS data. It’s never worked before. “