PM declares end of high tax and spend as he says govt will ‘get out of the way’
Boris Johnson has indicated a major reset in the direction of his government, with the Prime Minister declaring the end of Covid-era “corporate welfare” and that now is the time to “stop spending and start cutting taxes and cutting regulation”.
Johnson said “the overall burden of taxation is now very high”, after himself increasing the tax burden to the highest point in 70 years, and that “the answer to the current economic predicament is not more tax and more spending”.
Johnson said current inflationary pressures cannot be defeated by more government intervention and that “when the country faces an inflationary problem you cannot just pay more and spend more … we are constrained by the risk of fanning the flames of inflation”.
The UK is facing 40-year high inflation of nine per cent, with the Bank of England predicting the growth in the Consumer Price Index (CPI) to hit double digits this year.
He said the government will unveil a series of reforms to help people with the cost of living in the coming weeks, with meaures to “cut costs in every area of household expenditure, from food to energy to childcare to transport and housing”.
The Prime Minister promised his cabinet and Tory backbenchers that he was prepared to enact a smaller-state policy platform this week, after narrowly winning a vote of confidence in his leadership of the Conservative party.
Many in the party have complained that his expansive economic policy has been un-conservative and has helped drive the cost of living crisis.
The Times has reported that a part of this change could be cutting the basic rate of Income Tax by 2p by 2024, instead of the planned 1p cut.
“It is an aberration, the burden of tax, caused in no small part by the fiscal meteorite of Covid and it must come down because the answer to the current economic predicament is not more tax and more spending, the answer is economic growth,” Johnson said.
Channeling Margaret Thatcher, the Prime Minister added: “The best way the government can help is to simply get out of the way. To do less, to do it better or simply not at all.
“If government has billions, the markets have trillions. We need to see more of that investment by businesses here in the UK.”