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Senior Tories claim the Chancellor has been given bad advice and have drafted a package of targeted reductions to fire up the economy.<\/p>\n
They include cutting VAT on energy and fuel VAT by 5%.<\/p>\n
Easing the tax burden on November 22 is still seen as \u201cunlikely\u201d but possible. A Treasury source said: \u201cI don\u2019t think we\u2019ll be in the position to do any tax cuts at the autumn statement. It all depends on forecasts over the coming weeks.\u201d<\/p>\n
Former Secretary of State for Wales Sir John Redwood has drawn up the measures he believes will bring down prices and help generate growth.<\/p>\n
Sir John said: \u201cThe advice has been completely wrong on taxes and inflation. We need targeted tax cuts immediately.\u201d<\/p>\n
His suggestions include the 5% VAT cut on gas and electricity bills and 5% off petrol prices.<\/p>\n
READ MORE: <\/strong> Jeremy Hunt’s ISA allowance boost could offer ‘elegant solution’ to two issues<\/strong><\/p>\n The resulting black hole in finances would be filled by a \u201cproper freeze\u201d on civil service recruitment, forecast to generate \u00a32.5billion in the first year. Sir John urged the Chancellor to announce a rise in the VAT threshold on small businesses.<\/p>\n He claimed many such firms \u201cturn down work\u201d once their turnover hits \u00a385,000.<\/p>\n That would help bring down prices by boosting the supply of services.<\/p>\n Sir John also recommended measures to help the self-employed after \u201cpunitive\u201d changes over the last six years led to a reduction of 800,000 workers. The move would generate extra tax revenues, he added.<\/p>\n And he called for called for the 38% of shares in NatWest still owned by the state following the financial crash of 2008 to be sold.<\/p>\n Sir John, who served in Sir John Major\u2019s Government, said Mr Hunt had been advised that tax cuts are inflationary.<\/p>\n Don’t miss… <\/strong> However, he argued they could actually help bring down living costs by increasing supply if targeted correctly.<\/p>\n He said: \u201cA no-change budget is not the answer.<\/p>\n \u201cThe Bank of England drove inflation by printing money into the [Covid] recovery, not the private sector. I\u2019m very frustrated by the advice being given.<\/p>\n \u201cThe economic advice is wrong, full stop.\u201d<\/p>\n Mr Hunt is under mounting pressure to cut taxes from Tory backbenchers frustrated at the sluggish economy.<\/p>\n Business leaders have also raised concerns about the tax system, which they warn is hitting the high street and fuelling housing market problems.<\/p>\n Sir Nigel Wilson, group chief executive of Legal & General, said there were millions of unused bedrooms in homes across the country but stamp duty makes it too expensive for many older homeowners to downsize.<\/p>\n
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