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Wed, 27 May 2020

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Jacob Rees-Mogg lashes out at Theresa May’s tax rise plan to fund NHS cash boost

Jacob Rees-Mogg lashes out at Theresa May’s tax rise plan to fund NHS cash boost
3 min read

Jacob Rees-Mogg has dismissed Theresa May’s plan to hike taxes to help pay for a big spending increase on the NHS.

Taxpayers are expected to help fund part of a £20bn cash boost for the health services alongside what ministers are calling a 'Brexit dividend' of cash saved from leaving the European Union.

But Conservative backbencher and leading Brexiteer Jacob Rees-Mogg has blasted the plan, saying that tax rises could "stall the economy".

Answering questions on an LBC phone-in the Tory MP said: "I don’t think tax rises are necessary. I think it is the wrong approach to the economy.

"You need to look at the cuts to corporation tax, where the rate coming down from 27% to under 20% has led to an over 50% increase in the revenue from corporation tax.”"

“We need to be revisiting all our tax rates to see whether they are at the best rate economically and for raising funds. But there is no room for raising taxes."

He added: "This country is as highly taxed as a percentage of GDP as it has been since the early 1970s, late 1960s - and the idea that there are easy tax rises that won’t have economic effects that actually stall the economy is I think, for the birds.”

The Conservative backbencher also issued a veiled warning to Chancellor Philip Hammond against raising taxes in the next Budget saying: "I don’t think the Conservative party is here to increase taxes.

"Philip Hammond seems to think otherwise but he hasn’t yet presented a budget and he may find there is not a lot of support for tax increases.

“He did try it before, he tried to increase National Insurance and he had to back down, which was a clear attack on the self-employed and a great mistake.

“I think you make money available to the NHS by growing the economy, and you grow the economy by lowering tax rates. I think you stifle the economy by higher tax rates.

"You’ve got £10bn of it coming through from the Brexit dividend and that is important. Then you’ve got the budget deficit which has actually shrunk quite considerably so there is a little room for manoeuvre there."

Asked if he was coming from a different point of view from Theresa May he added: "Well I believe in what we said in our manifesto.

"It is really dangerous territory not to stick to the principle of your promise as well as the small print… but I think the impression at the last election was that we would not raise taxes."

Mr Rees-Mogg's intervention comes after Labour reported Mrs May to the Advertisting Standards Authority over her 'Brexit dividend' pledge, which followed a high-profile promise from Brexiteers to spend £350m-a-week extra on the NHS through funds no longer sent to Brussels.

Independent experts at the Institute for Fiscal Studies have also challenged the claim of fresh money to spend after the UK leaves the EU, citing existing spending commitments made since the Brexit vote, Britain's divorce bill and an expected economic downturn.


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