Chancellor Jeremy Hunt has no excuses – taxes must fall in next week’s Autumn Statement
For months the Chancellor has been stubbornly refusing to even consider tax cuts. The logic being that to do so would be to pour petrol on the inflation fire. However, this all changed this week when figures revealed that inflation has dropped – and significantly. Now that it appears prices are no longer spiralling out of control, Jeremy Hunt has a duty to start cutting away at Britain’s onerous tax burden. The Daily Telegraph revealed this week that the Prime Minister and Chancellor are considering cutting inheritance tax in next week’s Autumn Statement. It is a great place to start, not only because it is a “non-inflationary” giveaway, but also because the death duty has become ineffectual. Under the Tories it has mutated into a tax that catches out the middle classes and yet is easily avoided by the super rich. The Chancellor obviously has to keep his cool and keep inflation under control – to fail at that really would be the final nail in the Tory coffin – but he also needs to send a message of intent and acknowledge that taxes need to fall. Britain’s finances are looking up, and we need a break. This week JP Morgan estimated the Government has as much as £10bn in “head room” (that’s economist- speak for lower- than- expected future borrowing costs) meaning there is space in Treasury coffers for some giveaways. Committing next week to cutting a range of taxes from April next year is a reasonable response. Telegraph Money this week has run an online interactive tool that lets readers play Chancellor and select their own fiscal priorities. Tellingly, the overwhelming top choices are to unfreeze income tax thresholds and to abolish inheritance tax. The Government’s decision to freeze income tax thresholds in a period of high inflation is surely the biggest tax grab in modern times. Mr Hunt needs to right this wrong. This week, a study from house price website Zoopla revealed that young families were being stopped from getting on the property ladder by over-65s ‘The key to winning the next general election will be making people better off. Labour knows this’ refusing to downsize. It found that two fifths of homeowners aged over 65 live in a property that is larger than they need, meaning they are locking 2.6m homes. A stamp duty break for downsizers, or “last-time buyers” could be the remedy we need. Rishi Sunak delivered on his promise to halve inflation this year, with rising prices now at 4.6pc, compared with 11.1pc a year ago. This was a significant victory for the Tories that has been overshadowed by the Rwanda court ruling and Suella Braverman’s sacking. Forget the small boats and “woke” nonsense. The key to winning the next general election will be making people better off. Labour knows this. That’s why it is banking on becoming the party that can be trusted with the economy. The Autumn Statement is a chance for the Tories to lay the groundwork for successful re- election. Inflation is subsiding, but it has left a scar on Britain. Income and spending power has to catch up. A strong and competent Tory economic recovery is the best way to put Labour on the back foot.