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Tax cuts will boost growth and help households and businesses with the energy crisis

Tax cuts will boost growth and help households and businesses with the energy crisis

(Alamy)

4 min read

The Conservative Party has been rejuvenated by a change of leader. Liz Truss has emerged with strong support from the membership, with a new agenda fashioned to the spirit of the times.

She wishes to promote growth, spread prosperity and ownership and see off the recession the Ukraine war and energy crisis threatens.

Truss accepts the main tenets of the 2019 Conservative manifesto that helped elect us all. Indeed, one of her first decisions was to remove the National Insurance surcharge and the social care tax, which were against the promise of the manifesto. Many of us were unhappy about the Treasury-driven policy of putting in new, higher taxes at a time when we needed to increase business and jobs in the United Kingdom. Today we need to fight a recession threatened from the energy crisis and the United States forcing an economic slowdown to curb inflation.

The government’s strategy will be to get the UK making and growing more of the things we need at home

The new policies will help people and business through the energy price surge. Tax cuts leave people and business with more of their own money to spend, invest and save. Levelling up will remain central to the government’s approach, with Enterprise Zones establishing lower taxes and simpler regulations alongside freeports in areas needing more and better-paid jobs.

The government is well aware there is work to be done on public services. The NHS still needs to recover from the impact of Covid. We need to help recruit more doctors, nurses and dentists, as well as provide good pay and conditions as they do their important jobs. Lower taxes and pension tax changes will also help retain doctors who are thinking of early retirement in protest over tax levels. 

The welfare department inherits a successful reform with the transition of all claimants to universal credit by the end of 2024. But more needs to be done to match people on benefits with job vacancies. The government is offering training and support for disabled people, and mentoring to encourage people into work. The state will save money if we can fill jobs with people already living here, instead of inviting in economic migrants who need state support for housing, wage top-up and additional public service provision.

Conservatives are keen to see the end of the people trafficking across the Channel and look to Suella Braverman as the new Home Secretary to rein in this evil trade.

The main thrust of the government’s strategy will be to get the UK making and growing more of the things we need at home. We became chronically import-dependent on the European Union, running a huge balance of trade deficit with our European neighbours. As a result, the UK has had to sell lots of our assets to foreigners and borrow from overseas to pay the high import bills. I have always been more concerned about the balance of payments deficit than about the state deficit, as it leads to foreign currency obligations. Removing our payments to the EU will help, but importing energy is coming at an ever-higher price and with more risk that supply will not be sufficient.

This decade we have to cope with the loss of substantial nuclear energy capacity. New nuclear power stations rightly to be commissioned will not be available before 2030. Adding more wind turbines leaves us without power on windless days. Experiments with storing wind power through large battery farms or green hydrogen need to be expedited to find a solution to store electricity.

This decade, whatever we do, the UK will mainly heat homes with gas boilers and will largely get to work and deliver goods with petrol and diesel vehicles. That is why it is right to invest in more UK production of oil and gas. It will mean less CO2 globally than importing liquified natural gas, and it will mean much more tax revenue in the UK for better public services.

 

John Redwood, Conservative MP for Wokingham.

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