A British politician, Chancellor Jeremy Hunt, said that it is unlikely for the government to implement a tax cut, saying that inflation is the "best tax cut right now."
The lawmaker said that the best solution that Prime Minister Rishi Sunak and he can do to help families across the country is to halve inflation. Hunt argued that inflation is eating away at citizens' pay packets, which is their spending power.
Britain's Potential Tax Cut
He added that the government recognized that a low-tax economy is vital for dynamism and entrepreneurialism. It also encourages people to take risks, which is why they want to implement a tax cut only when the time is right. Hunt's remarks were made during a speech at Bloomberg's London headquarters, where he noted that the government was looking only to cut taxes when necessary. He added that lawmakers are committed to a low-tax economy.
He said the difference between Conservatives and Labour is that the former cut taxes when they can while the latter never do. Hunt noted that this was because the Conservative Party recognizes that a low-tax economy is important for the people, as per Yahoo News.
Hunt also argued that to boost the creation of more businesses; the government must first lower taxes. He said that high taxes directly affect the incentives that drive the decisions made by entrepreneurs, investors, or larger companies, about whether or not to pursue their objectives in Britain.
The lawmaker said that sound money must come first but noted that ambition should be nothing short of having the most competitive tax regime of any major country. This means having restraint on tax spending.
The chancellor also said he wanted to reverse what he considered a "declinism" attitude in the United Kingdom. He declared that the country's economy had grown at about the same rate as Germany's since the 2016 European Union referendum.
Halving Inflation Rate
Hunt admitted that the UK is currently going through a "difficult patch" but insisted that the entire nation could make it to the other side. The lawmaker also set out a plan on Friday to help lift the UK's economic growth, according to BBC.
In December, government borrowing, the difference between spending and tax income, rose to a record $34 billion. The number represented the highest amount for that month seen since 1993.
The country's borrowing was driven by the cost of assisting households and businesses with rising energy bills. Furthermore, higher inflation pushed up interest payments on debt that the government owed.
Despite the rate of price increases, which is how inflation is defined, it has begun to slow, but at 10.5%, it remains close to a 40-year record. On the other hand, Sunak pledged to halve the inflation rate by the year's end.
The annual inflation rate in the UK rose to 11.1% in October, which fueled a cost-of-living crisis and a series of worker strikes. The employees sought pay raises to keep up with rising food and energy prices, said ABC News.
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