Liz Truss ‘won’t let Whitehall blob block £30billion tax cuts’, as cabinet ally vows the Foreign Secretary will have the final say
- Truss won’t allow civil servants to stop £30billion in tax cuts, Cabinet ally vows
- James Cleverly said it was for officials to give advice but politicians must decide
- Foreign Secretary has set herself on collision course with ‘Treasury Orthodoxy’
- Mr Cleverly’s comments came as Truss’s tax plans received economists’ support
Liz Truss will not let civil servants stop her implementing £30billion worth of tax cuts, one of her Cabinet backers has vowed.
Education Secretary James Cleverly said it was for officials to give advice but the final decisions have to be made by politicians.
The Foreign Secretary has already set herself on a collision course with the civil service ‘blob’, pledging to ‘take on the Treasury orthodoxy’ and ‘ensure Whitehall gets out of the way of our job creators’.
Truss addresses supporters at Ashley House in Kent during a campaign stop on Saturday
Mr Cleverly’s comments came as Miss Truss’s plans to reverse the national insurance hike and scrap the planned rise in corporation tax received a boost with backing from a group of prominent economists.
Mr Cleverly, who served under Miss Truss in the Foreign Office until earlier this month, was asked what effect her policies would have on the NHS. He replied: ‘What Liz has said is that we need to go for an economic growth strategy, and increasing the tax burden on businesses – which are inevitably going to be passed on to consumers – is not the way of doing that.
‘We are already highly taxed as a society and I think when there are inflationary pressures, when prices are going up, what we need to do is to make sure we reduce the bit of people’s expenditure that we are in direct control of and that is tax.’ Mr Cleverly was asked yesterday by Sky News if he respected the Office for Budget Responsibility, the economic watchdog which this month warned that using borrowing to fund tax cuts risked fuelling inflation.
Mr Cleverly insisted: ‘Ultimately, it’s the decision of politicians which are then implemented by officials. It shouldn’t be the other way around. It should not be officials telling politicians what they should and should not do policy-wise.’
Told that major tax cuts would push up interest rates, increasing the pain for millions of homeowners with mortgages, he said: ‘Well, the point is that tax decreases will stimulate economic growth. That has got to be the foundation.’
In a letter to The Daily Telegraph, seven economists including Boris Johnson’s former adviser Gerard Lyons offered their support for Miss Truss’s plans for ‘timely, targeted and fully affordable tax cuts’.
Led by Dr Graham Gudgin from the Centre for Business Research at Cambridge University, they said cuts were necessary because the UK is ‘on track for its highest tax burden in 70 years, placing an unbearable strain on households and undermining competitiveness’.
Backing Miss Truss’s plan for an emergency Budget to axe the NI rise, they say: ‘There is a need for targeted tax cuts to happen immediately, while further fully affordable measures can be brought forward in a Budget, alongside other options.’ A senior economist at leading financial service Bloomberg also agreed that Miss Truss’s manifesto would boost growth.
Dan Hanson estimated her plans would add 0.6 per cent to GDP next year – although he also calculated that inflation would continue to rise. By contrast, Tory leadership rival Rishi Sunak’s policies, including an increase in corporation tax, would mean ‘very slow’ growth next year.