Jeremy Hunt risks angering Tory MPs by dampening hopes of bigger budget cuts on Wednesday

Chancellor Jeremy Hunt risked further angering Tory MPs today as he again dampened hopes of bigger tax cuts in his budget on Wednesday.

There is pressure from conservative backbenchers on Mr Hunt to reduce the tax burden on families and businesses – particularly in light of the proposed increase in corporate income tax to 25 percent.

But while the Chancellor this morning insisted that “a Conservative government will always cut taxes when we can,” he vowed to be “responsible” in managing Britain’s public finances.

Mr Hunt has signaled there will be new tax breaks for companies in his tax package on Wednesday after hinting at how action could be taken to change the “effective rate” of corporate tax.

Still, he showed little appetite for reversing next month’s planned hike in the corporate tax rate from 19 percent to 25 percent.

There is pressure from conservative backbenchers for Jeremy Hunt to reduce the tax burden on families and businesses – particularly in light of the proposed increase in corporate income tax to 25 percent

Mr Hunt has been challenged over his earlier call – when he briefly ran for Tory leadership last summer – for the corporation tax to be cut to 15 per cent

In a Sky News interview this morning, the Chancellor was challenged over his previous call – when he ran briefly for the Tory leadership last summer – for a corporate tax cut to 15 per cent.

“It’s the same Jeremy Hunt that’s with you now, and I still want us to have the most competitive corporate taxes in the world,” he said on Sophy Ridge’s Sunday show. “I’m a conservative who believes in a low-tax economy.”

But Mr Hunt added he must also be “responsible for public finances”.

“We will not do what the last Labor government did and run out of money,” said the Chancellor. “Businesses need the stability that comes from doing good business, so we’re going to get there incrementally, but we’re going to get there.”

When told he was running the economy like he was ‘Jeremy from Accounts’, Mr Hunt replied: ‘I think you’ll have to wait and see what I say on Wednesday.

“But you know, Jeremy the Chancellor will be in charge of public finances and I have absolutely no apologies for that.”

Former Chancellor Philip Hammond told the same program that raising corporate taxes was “the right decision for now” but warned that a 25 per cent level should not become a “new normal”.

He also said he expects Mr Hunt to tinker with tax breaks and relief to lower the “effective” tax rate for companies.

“What’s really important for businesses is the effective tax rate and I expect we’ll hear the Chancellor take some steps towards exemptions and relief so that for many businesses, particularly those who invest heavily, the effective tax rate is the effective tax rate.” Corporate tax rate will be reduced somewhat,” said Lord Hammond.

The issue of tax cuts has become an ongoing issue between the Government and Tory MPs, with Britain’s tax burden on course to hit a 70-year high.

Allies of former Prime Minister Liz Truss formed the Conservative Growth Group to pressure Mr Hunt to cut taxes and adopt pro-growth policies.

Just days before the budget, it also emerged that senior Tories have written to Mr Hunt to urge him to back out of an international agreement that says corporate taxes should never be cut below 15 per cent.

According to the Telegraph, a group led by Ms Truss and ex-Home Secretary Priti Patel called on the Chancellor “not to push forward and give up sovereign tax rights”.

“As a party elected to ensure Britain regains ‘control’ from the EU, it is noteworthy that we should be urged to hurry and give up sovereign tax rights under the OECD initiative, especially if so many questions about the measure remain unresolved.” They said.

“We agree we risk damaging the UK’s economic competitiveness by moving forward with the current implementation timeline.”

Source: | This article originally belongs to Dailymail.co.uk