Rishi Sunak to say he wants to cut taxes ‘sustainably’ in landmark speech

theguardian.com:

The chancellor, Rishi Sunak, will say he wants to cut taxes “sustainably” and downgrade the role played by the state as an engine of growth, in a landmark speech that aims to quell concern among Tory backbenchers about the tax burden rising to its highest level in 70 years.

Spelling out a personal philosophy on Thursday in his first major speech since Downing Street scandals opened the door for a change of leadership at the top of the Conservative party, Sunak will say only a market economy, driven by private sector spending, will create the dynamism needed to maintain sustainable growth.

Governments should set the conditions for businesses and households to thrive, but otherwise should take a back seat, he will argue.

“I firmly believe in lower taxes,” he will say in the Mais lecture, an annual event at Bayes business school that chancellors have used in the past to outline their overarching doctrine.

A rise in national insurance in April and tax rises on businesses next year will push the overall level of tax to about 35.5% of GDP by the end of the parliament – its highest level since 1948.

Though still lower than France, at more than 40%, and Germany at 39%, several Tory MPs have complained that the rise in taxes will undermine the party’s economic credibility at a time when households face an unprecedented squeeze on living standards.

Sunak has battled several cabinet colleagues in recent months to restrain public spending, most recently rejecting health secretary Sajid Javid’s demand that billions of pounds be allocated to maintain free Covid-19 testing.

While some MPs are expected to interpret his comments as a rebuff to Boris Johnson’s aim to ramp up government spending to level up the regions and improve public