Tax cuts: will Boris Johnson bow to the pressure?

PM’s promises on tax to save his premiership are likely to face resistance from Rishi Sunak

Boris Johnson
(Image credit: Chris J. Ratcliffe/Bloomberg via Getty Images)

Boris Johnson has been told by members of his cabinet that he must cut taxes this year if he is to save his ailing premiership.

The Times reported that Johnson has made a “broad pledge” to deliver tax cuts “once the economic outlook improved” in a bid to shore up support from his party after Monday’s damaging confidence vote.

The Guardian similarly reported that Johnson had included a promise of tax cuts in his “make-or-break” speech to backbench MPs as he battled for his job ahead of the confidence vote brought against him on Monday night. Johnson told MPs: “The way out now is to drive supply side reform on conservative principles and to cut taxes and to drive investment in the UK.”

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Tax cuts on top of Tory ‘wish-list’

Senior Conservatives have accused him of failing to move quickly enough on the issue. They are “impatient” for Johnson to move from “campaign mode” to delivering what they believe to be a “proper Conservative agenda for government”, said Politico. And “top of the wish-list” for many influential backbenchers, and from the right of his party, is tax cuts for workers and business.

Esther McVey, a former cabinet minister, wrote in the Daily Express that the government needed “to find their way back to the Conservative path”. She added: “Covid turned them into socialists - removing even the most basic freedoms, spending money as if there was no tomorrow and putting up taxes to the highest levels in 70 years.”

Another minister who has publicly called for more tax cuts is Business Secretary Kwasi Kwarteng. He told the BBC yesterday that he wanted to see “very radical” tax cuts as soon as possible. Foreign Secretary Liz Truss also told The Times that the government’s agenda had to include “getting taxes down and getting the economy going”.

Damian Green, a former cabinet minister has also backed a demand from the Adam Smith Institute for the government to reduce the tax burden, reported The Guardian.

“One of the best ways to help people in a cost of living crisis is to cut the taxes they pay, whether personal taxes or the tax on goods and services,” said Green. “I urge this path on the chancellor of the exchequer.”

Chancellor to cut business taxes

But Chancellor Rishi Sunak has already played down chances of any interventions before the autumn budget, which is likely to focus mainly on cutting business tax.

“We will be setting out a range of tax cuts and reforms to incentivise businesses to invest more, train more and innovate more,” the chancellor said in an address to the Onward think tank last night.

The prime minister will also join Sunak in a planned economic speech next week, but the focus is likely to be on cutting corporation tax, rather than personal taxes for workers. According to The Sun, the government will say it is looking at ways to “offset next April’s corporation tax hike to 25 per cent for firms that invest in things like new technology”.

The National Insurance contributions starting threshold will also rise by £3,000 to £12,570 from next month.

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