Liz Truss allies offering tax alternative Budget to Jeremy Hunt just months after former PM's resignation

Liz Truss's allies will propose an alternative low-tax Budget to Jeremy Hunt
Liz Truss's allies will propose an alternative low-tax Budget to Jeremy Hunt
Jonathan Brady
Georgina Cutler

By Georgina Cutler

Published: 13/02/2023

- 13:40

A Tory growth group is set to propose several policies in an alternative low-tax Budget

Liz Truss’s allies will present Jeremy Hunt with a set of new low-tax policies including a cut to VAT on energy bills.

The group of Conservative MPs are also set to tackle concerns over Britain becoming “uncompetitive” with plans to slash the burden on businesses.

Senior Tories have warned the Chancellor that a majority of backbenchers want to see taxes cut, but Treasury insiders insist that reducing levies now “will only fuel the inflation fire”.

The Confederation of British Industry has also urged Hunt to introduce a new tax break to avoid a damaging recession.

Chancellor Jeremy Hunt before speaking to the media at Victoria Place Shopping Centre, Woking, in response to the Bank of England Monetary Policy Report, in which they raised interest rates to 4% from 3.5%. Picture date: Thursday February 2, 2023.
A Tory growth group are set to pitch a new set of policies to Jeremy Hunt
Jordan Pettitt

Calls to make cuts are being led by the Conservative Growth Group (CGG) who broadly back Truss’s economic ideas.

The group demands include ditching the rise in Corporation Tax from 19 per cent to 25 per cent and reform levies which batters the self-employed.

Proposals from the group would also slash VAT on energy bills as well as green levies on heavy industry.

More than 50 MPs are thought to be backing the CGG.

The package includes ideas championed by Truss but does not go as far as the dire mini-budget.

Truss’s brief premiership lasted just 49 days as she was forced to quit after then chancellor Kwasi Kwarteng’s £45 billion package of unfunded tax cuts sent markets into financial meltdown and tanked the pound.

Ranil Jayawardena, one of the organisation’s founders, told the Chancellor that keeping Corporation Tax at 19 per cent “would pay for itself”.

“Just look at AstraZeneca’s decision not to build their new £300 million plant here, which would have created more good jobs and boosted tax receipts,” he told The Telegraph.

“Growing the economy by encouraging enterprise and incentivising investment is the way to pay for our public services.”

Sir John Redwood, a senior MP has drawn up a list of potential tax cuts that the group could back.

Environment Secretary Ranil Jayawardena arrives in Downing Street, London following the resignation of Liz Truss as Prime Minister on Thursday. Picture date: Monday October 24, 2022.
Ranil Jayawardena, one of the organisation’s founders is leading the proposals
Aaron Chown

It is thought to focus on the targeted reductions that would do the most to boost business investment and encourage economic growth.

“There are dozens of Conservative MPs who take the view that the growth strategy the Government has headlined needs some more positive measures behind it,” Redwood told Sky News.

“A majority of the Conservative backbench will agree… that they want targeted tax cuts. The majority definitely believes that you don’t get growth without more realistic tax levels.”

A Treasury source insisted that Hunt “wants to lower the tax burden but we need sound money first” and that “high inflation is the single biggest barrier to growth”.

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