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The Independent UK
The Independent UK
National
David Lynch

Senior Tories call for faster movement on low tax economy plans

PA Archive

The Chancellor must speed up the process of moving towards a low-tax economy, senior Conservatives have warned.

Tory former minister Dr Liam Fox was among the Conservative MPs urging the Government to go further and faster with plans to cut taxes.

Dame Priti Patel, the Conservative former Home Secretary, joined the calls and suggested merging income tax and national insurance (NI) as a means of making the tax system simpler for individuals.

The senior Tories made their plea following the autumn statement, in which Jeremy Hunt announced plans to cut the main rate of national insurance from 12% to 10%, which he claimed would save someone earning £35,000 more than £450.

The Chancellor also confirmed a tax break, known as full expensing, which allows firms to cut their bills if they invest in new equipment, will be made permanent in what he claimed was the “biggest business tax cut in modern history”.

As MPs debated the measures the Chancellor had announced, Dr Fox said: “One of the other things that I welcome today is that we are moving slowly, I would argue still a little too slowly, towards a lower tax economy.

“But the Chancellor set out the reasons why a low-tax economy was a good thing, it’s not just an abstract economic argument.

“It fits with our ideas, Conservative ideas of individual responsibility of reducing the size of Government, giving individuals greater choice and providing incentives for those who will generate the wealth upon which our future public services will depend.”

Dr Fox also called for freeports to have greater freedoms and for their regulations to be relaxed as part of a trial.

He said: “I think improving the horizon for freeports by up to 10 years will give additional stability but again I hope we can look at how we can have a deregulatory exercise in these areas, which can test out exactly how much we could get were we to expand the concept of freeports more.

“I hope we can look more at the experience of countries like the United States where the freeports have greater freedoms than they have already in the United Kingdom.

“The Government is moving in exactly the right direction, let’s move further and let’s move faster on that.”

Conservative former Treasury minister Richard Fuller said: “I would like to congratulate the Chancellor on making a reasonable and good start, but we have a very, very long way to go to get back to Conservative principles in public financing.”

He added: “It is true that this… at the moment is the largest tax-raising Parliament of any. That will be extremely difficult for me to explain to my constituents.”

I would love to see a simple system where quite frankly we do not have the burdens of bureaucracy
— Dame Priti Patel

Dame Priti added: “I urge everyone on the frontbench and the Government to continue to look at ways to lower taxes and actually personal taxes because times have been tough for the British public and we know that.

“We want to ensure that all our constituents are able to keep more of the money that they earn and ultimately have a secure economic future.”

She told the Commons she would like to see a “complete streamlining, a simplification of the tax system”.

The Conservative MP for Witham added: “Even on national insurance I would like to see measures for the merger of income tax and NI. I would love to see a simple system where quite frankly we do not have the burdens of bureaucracy.”

Labour chairman of the Work and Pensions Committee Sir Stephen Timms meanwhile warned that proposed reforms to the work capability assessment will “make things very difficult for a significant number of people”, adding it was not clear what would replace the assessment if it is scrapped.

Addressing other welfare changes, he said: “It’s very clear I think that sanctions are already at a high level for people claiming universal credit and the other working-age benefits.

“There is no evidence at all that what is proposed will make it more likely that people will move into work.

“And particularly where people are out of work because of a mental health problem there is growing evidence that increasing sanctions makes matters worse.”

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