It was late and great American rapper The Notorious B.I.G. who sang ‘Mo Money, Mo Problems’ and I wonder if Rishi Sunak and Jeremy Hunt might be thinking the same as The Notorious B.I.G.
Because of the fiscal headroom has increased by nearly £14 billion since March there is demand for tax cuts from the cosplaying Thatcherites who seem to forget Lady Thatcher only cut taxes after ensuring the public finances were in a sound position which meant taxes went up at the start of her premiership.
I’m not sure cutting a tax that fewer than 4% of the population will ever pay will boost Tory prospects in the current situation (we’re not in 2007 anymore), as the IFS have observed the ‘wealthiest 1% would get half the benefit of scrapping inheritance tax, with an average tax cut of £1 million’ will stop the Tories looking like heartless out out touch elitists as they freeze non pension benefits. Hard working families would also benefit from tax cuts now.
In the space of a few weeks we’ve gone from Hunt saying tax cuts are virtually impossible to tax cuts next week, it makes the government look not very competent, the fact this has already leaked means if it isn’t announced increases the incompetence look and allows their opponents to prepare and dulls the impact of the actual announcement.