Cabinet ministers back Tory push against Sunak for lower taxes post-Covid
Some of Boris Johnson’s highest profile cabinet members are among 46 Tory MPs that today backed a new campaign group aiming to push Rishi Sunak to adopt a more low-tax agenda post-Covid.
The Free Market Forum, run by the Institute of Economic Affairs think tank, will look to “refocus the political debate” toward “free enterprise and social freedom” after the Covid crisis, after public spending last year reached its highest relative level since World War II.
Sunak announced in last month’s Budget that much of the spending would be paid off by taxing the UK’s richest companies, with his plans set to implement the UK’s heaviest tax burden since 1968.
Home secretary Priti Patel, international trade secretary Liz Truss, business secretary Kwasi Kwarteng and work and pensions secretary Therese Coffey are among the supporters of the Free Market Forum.
Bishop Auckland MP Dehenna Davison and Buckingham MP Greg Smith will be the inaugural co-chairs of the group.
In a statement released yesterday, the pair said: “The last year has been an incredibly difficult one for everyone and the government has had to take decisions – particularly on spending and peoples’ liberties– that it would never have contemplated in normal times.
“We intend to help make the case for a return to a smaller state and lower taxes as soon as possible, as well as helping people reclaim their individual freedoms.”
Boris Johnson’s government has been the most interventionist since the 1940s, with the Treasury stepping in to pay more than 11m people’s wages throughout the Covid crisis and spending hundreds of billions of pounds to keep the economy afloat.
This led to a £355bn Budget deficit in 2020-21 – 17 per cent of national income.
For comparison, the Budget deficit was around 10 per cent of national income in the aftermath of the 2008 financial crisis.
Sunak’s plan to claw back the spending comes partly through increasing corporation tax from 19 per cent to 25 per cent for the UK’s largest companies in 2023.
Stealth income tax rises on low and middle-income earners were also in the Budget.
The Institute of Economic Affairs said at the time that “dialling up taxes was a mistake, and our economic growth will be less impressive as a result”.