‘Can’t come soon enough’: Tory groups cheer news of potential 2p income tax cut

JESSICA FRANK-KEYES

RISHI SUNAK’s mooted plan to reduce the tax burden from a seven-decade high with a 2p cut in income tax ahead of the next election has been welcomed by Tory campaign groups. Reports surfaced in the Sunday Telegraph that the PM – an ex-City banker – is keen to cut charges in order to incentivise work and wants to head into the campaign “promising more”. Officials have privately suggested that the economic recovery is likely to be strong enough by early next year for Sunak to announce a cut in the spring statement, according to the report.

It comes just days after the International Monetary Fund warned ministers against tax cuts, which they said risk fuelling inflation and keeping interest rates high.

Ryan Shorthouse, chief executive of Conservative think tank Bright Blue, said that the government was right to focus on cutting taxes on income from work and stressed that “the weight of taxation in this country is on work and working-aged people”.

“The most targeted way of cutting taxes on income from work would be raising the personal allowance for income tax and the primary threshold for national insurance,” he added.

“The government could choose to go quicker or deeper on cutting taxes on work by raising taxes on income from assets, such as property, dividends and capital gains,” he said.

John O’Connell, chief executive of the Taxpayers’ Alliance, welcomed the proposals, saying: “With taxation running at record levels, tax cuts can’t come soon enough.

“Instead of waiting for a general election giveaway, ministers should get on with meaningful tax cuts now.” be that a house, a sugar-free diet coke or a pack of cigarettes. Other groups are doing similar work; and it is only if those organisations are able to ‘roll the pitch’ for Hunt and Sunak that they’ll get away with a tax cut which will make the public finances look a little shakier in the short-term but give the economy a desperately needed boost. In short, we need our politicians to show courage and conviction: an interesting idea.

What The Other Papers Say This Morning

UKRAINE-RUSSIA

PRO-NAVALNY

WAR:

Protesters

DETAINED IN MOSCOW

Supporters of jailed Kremlin-critic Alexei Navalny who gathered to call for his release on his 47th birthday have been arrested by Russian authorities. Navalny is serving nine years in prison.

THE GUARDIAN THAMES WATER ACCUSED OF ‘FLIMSY PR STUNT’ OVER BONUS AS CEO’S PAY SWELLS Thames Water is preparing to announce its CEO is landing a £1.5m package, nearly double her annual salary, despite her saying she would shun the bonus amid criticism of water companies.

THE FINANCIAL TIMES

INDIA BLAMES TRAIN CRASH ON SIGNAL FAILURE AS DEATH TOLL NEARS 300 Indian authorities said preliminary findings showed a signal failure caused a train accident that killed 300 people on Friday, as prime minister Modi vowed to punish those responsible.

Hunt hopes to boost staff retention with share reforms

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The intention behind the programmes are to amplify employee motivation and strengthen ties to their employer, hopefully raising staff retention and boosting productivity.

They are targeted at low earners who often lack the resources to build up a portfolio of assets to strengthen their long-term financial health.

Research carried out by HMRC also shared with City A.M. found 81 per cent of firms that participated in the employee share schemes say they have fortified their business. Almost three in four said they helped retain and recruit staff.

Half of the companies surveyed by the taxman said they took advantage of the ownership scheme “to create a feeling of ownership among their staff”.

Victoria Atkins, financial secretary to the Treasury, told City A.M.: “Employee share schemes are an effective way to boost motivation in workforces by giving people an extra stake in what they do – and they offer a boost for business.”