Jeremy Hunt has been warned against “taxing the UK to death” as veteran Tory MP John Redwood urged the government to “go for growth”. Ahead of the fall statement – due this morning – Mr Redwood called on the Treasury to “compensate for the coming recession” and “pull the levers appropriately”. The MP for Wokingham, a longtime advocate of tax cuts, said the government should offer people “fiscal incentives” rather than raising tax rates and cutting government spending.
The Chancellor is expected to announce a number of tax increases as part of an effort to fill a £50bn gap in public finances.
Mr Hunt understood that he intended to implement an equal split of tax increases and spending cuts, which could translate into £25bn in increases for the taxpayer.
His plan for the economy will be revealed at 11.30am today when he delivers his autumn statement to MPs in the House of Commons
Speaking to TalkTV, Mr Redwood said: “I think we should go for growth.
“We have to compensate for the coming recession, which is a Western phenomenon – all Western economies made the same mistakes.
When asked whether there will be “only bad news”, the MP replied: “I hope the Autumn Declaration is a bit more cheerful than that.
“We have to cheer up the country and go for growth.
He added: “What I’m nervous about is that today we’re probably going to be focusing on a black hole that’s going to be there three or five years from now.
“The truth is that the OBR doesn’t know what the state of the deficit will be in five years and no one else does either.”
Mr Redwood urged the government to “pull the levers the right way”, explaining: “The Bank of England has moved from a far too easy policy – creating inflation – to a very strict policy, which inflation will fall.
“I do believe that the bank said inflation will be below two percent because the very hard drug is being administered.
“So the government needs to compensate for that, which is why it needs to go for growth in its fall statement.
“Yes, it needs to cut wasteful and unnecessary spending, it needs to stop all these hotel bis and deal with the border issues, it needs to get more people back to work – but it shouldn’t burden us to death.
“It should provide people with tax incentives and assistance.”