Jeremy Hunt admits his £25bn tax raid is anti-growth… but insists he wants to reduce the levies over time
- Chancellor Jeremy Hunt has admitted £25bn tax raid could damage UK growth
- He told Commons Treasury committee he wants to bring down taxes long term
- He said the tax burden would spike at 47%of GDP before falling back to 43%
Britain’s record taxes risk damaging growth, Jeremy Hunt admitted last night.
His £25billion tax raid last week pushed the UK’s tax burden to its highest level since the Second World War.
But the Chancellor told the Commons Treasury committee yesterday he still wants to bring down taxes in the long term and acknowledged that the sheer scale of taxation – it tops £1trillion for the first time this year – could damage the economy.
‘I am very concerned that if taxes are too high it makes it difficult to be a modern, dynamic economy,’ he said.
‘I am concerned about the effect on incentives. I am a Conservative who believes you should bring taxes down.’
Britain’s record taxes risk damaging growth, Jeremy Hunt (pictured) admitted last night
Labour says the Chancellor and PM Rishi Sunak (pictured) are shielding the super-rich from contributing their fair share
He said the tax burden would spike at 47 per cent of GDP before falling back to 43 per cent – still far above the pre-pandemic level of 39 per cent.
His comments will fuel Tory fears that the rises were an overreaction to ousted prime minister Liz Truss’s aborted tax-cut plans. But Mr Hunt yesterday said that soaring inflation had left him little choice.
Debt interest alone had doubled to £120billion – more than twice the budget of the Ministry of Defence – and he suggested that taxes will only fall once both inflation and interest rates are under control.
He also revealed he has asked the Treasury to find out how much would be raised by closing the controversial non-dom tax loophole for people in Britain who pay no UK tax on their offshore income.
Labour says he and PM Rishi Sunak are shielding the super-rich from contributing their fair share.
Mr Hunt has disputed claims that the move could raise £3billion per year, arguing that he would prefer wealthy people ‘stayed here and spent their money here’ rather than move abroad.
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