A cabinet minister today made the case for tax cuts to deal with the huge economic black hole blown by Covid-19 in Britain’s finances.
Chancellor Rishi Sunak is said to be considering a range of tax increases after spending tens of billions to limit the impact of the crisis on businesses and jobs.
However, Work and Pensions Secretary Thérèse Coffey appeared to cast doubt on such a strategy by suggesting that lowering tax rates could actually bring in more revenue.
“When we’ve cut tax rates we’ve actually seen taxes increase,” she told Times Radio. “So tax rates is a very dynamic situation. Some people might assume the only way to get tax up is to increase tax rates, but we have shown in our economic history the opposite.”
Her intervention ahead of an autumn Budget highlights the opposition Mr Sunak will face from Tory MPs to several tax hikes floated in recent days.
A Treasury source said reports of a 5p rise in fuel duty were “totally untrue”, but did not rule out a hike in fuel taxation.
Ministers are also reported to be considering reforming capital gains tax so people pay it at the same rate that they do income tax, putting up corporation tax from 19 per cent to 24 per cent, ending the pension triple lock and scaling back pension tax relief.
