The UK government is split over the tax cuts MPs and ministers have been calling for to tackle the cost of living crisis and boost economic growth, The Sunday Telegraph reports.
Sources close to Prime Minister Boris Johnson have purportedly clashed over demands to take urgent action on the issue.
In response to the calls, one source was cited as telling MPs to “grow up” and stop behaving like they were in “nursery school”.
“This isn’t ‘the Government has had a s*** week, we need a reset, cut taxes.’ This isn’t nursery school. This is grown-up politics, this is government.”
Johnson, who recently survived a no-confidence vote over “partygate” - gatherings in and around Downing Street which were purportedly in breach of COVID-19 lockdown restrictions - is believed to be under pressure to deliver policies that might "draw a line" under questions about his leadership.
On 6 June, 211 of the 359 Tory lawmakers supported Johnson in the no-confidence vote. However, 148 conservative MPs - more than 40 percent - voted for the PM to be jettisoned.
Accordingly, the UK PM is said to be anxious to revive his own political fortunes with a set of “appealing” policies.
“Three weeks ago, the party was screaming that it wanted a big bung to the general public, and now they are screaming about tax cuts. We have got to get back to grown-up politics where things happen slowly, sustainably and when they are doable,” an insider was cited by The Sunday Telegraph as saying, adding that although there was “no Tory in the land more committed to tax cuts than Boris ... the money isn’t there to cut taxes now.”
Tax Cuts Controversy
The growing cost of living crisis, driven by the soaring price of wholesale gas and electricity sparked originally by a post-pandemic surge in demand. It was then exacerbated by economic blowback from American, British and European Union sanctions on Russia which have been hitting household budgets since the launch of its special military operation in Ukraine.
A Health and Social care levy came into effect in April - a 1.25 percent increase on National Insurance Contributions designed to support the National Health Service (NHS) across the UK. To alleviate the pressure on British taxpayers, UK Chancellor Rishi Sunak - who had been under pressure to ditch the rise in the face of a rocketing cost of living - raised the threshold at which people start paying National Insurance.
However, amid increased calls for tax cuts, Johnson is described as unable to deliver his promises ostensibly because of opposition from Sunak.
“Rishi will not deliver reckless, unfunded tax cuts just to save a Prime Minister who is weakened within his party. As a chancellor, you just can’t do that. It’s nonsense policy-making,” a Treasury source was quoted by the newspaper as saying.
A Tory source was cited as confirming this, suggesting that Johnson was “caught in the headlights of the oncoming Treasury”.
“Sunak seems to be completely locked into Treasury orthodoxy,” the Tory added. Another Treasury insider warned that tax cuts now would only “add fuel to the inflation fire”.
‘Political Annihilation’ Without Tax Cuts
Sajid Javid, the UK Health Secretary, urged on 11 June that Sunak’s planned 1p cut to income tax in 2024 “should be brought forward,” if possible.
A similar call was made by John Whittingdale, the former Cabinet minister, who was cited as saying:
“I would like to see tax cuts going ahead. I think the PM has been given the chance to show he is the right person to lead the country through these difficult times.”
An even stronger warning was issued by Jake Berry, Tory MP for Rossendale and Darwen and leader of the Northern Research Group of backbenchers. He said that is Johnson should fail to deliver on policies such as tax cuts, he risked leading the Conservatives towards “political annihilation”.
Tom Tugendhat, Chairman of the Foreign Affairs Committee, was quoted as saying that the Tories are on course to “preside” over a “tax-and-spend ... socialist nightmare”.
In a speech delivered in north-west England on Thursday, Johnson said that “the overall burden of taxation is now very high: sooner or later - and I would much rather it was sooner than later - that burden must come down”.
However, only last week Sunak struck a more cautionary tone, saying:
“Tax cuts are the reward for a Government prepared to make difficult choices elsewhere. We are going to get there, but in a responsible way.”
Weighing in on the purported disagreements between Johnson and Sunak, a source close to the PM was cited as saying:
“The boss believes it is much better to have more money in families’ pockets than not. He gets that action is necessary and action will be taken.”