Sir Jacob Rees-Mogg has called on the government to implement a ‘bonfire of taxes to ignite the British economy ahead of the Autumn statement by the Chancellor.
Speaking on his GB News show, Sir Jacob said: “We need to be thinking about growth. We need an economy that will grow and that needs taxes at the right level that don’t inhibit growth,
“Bear in mind that the OBR has consistently underestimated the public finances; it’s got them wrong again and again. This year it’s thought there will be £20 billion of headroom from the OBR’s previous predictions.
“We should give that money back to people. But we should also cut spending. I’m not in favour of unfunded tax cuts – I don’t think that works and I don’t think it’s the right way to proceed.
“But every pound of your money we spend should be spent well.
“When the Prime Minister announced the cancellation of the northern part of HS2 he shouldn’t have reallocated that money – it should be saved.
“Just reallocating it doesn’t mean that the process of spending it has been well thought through. It was something really for a party conference speech. That money should be saved.
“The civil service should be reduced. When I was the Minister for Government Efficiency we had a plan to get it back to 2015/16 levels which could have saved £5-6 billion pounds.
“The proposed welfare savings to encourage people to go into work from 2025 should be brought forward to 2024.
“If you do things like this you suddenly find you’ve got about £30 billion that you could return to taxpayers.
“Bear in mind, it’s your money. There is no such thing as government money.
“And where should this go? Well it should prioritise investment, helping businesses and removing the penal effects of inflation.
“Inheritance Tax, you may think that inheritance tax is just a boon for the rich, but it’s not. It falls on many people whose only asset is their family home.
“But it also has damaging, distorted effects on how capital is allocated because people invest their money for tax reasons not for the best economic reason.
“And why is it better to invest in a small company than to invest in one of Britain’s leading corporations? One of them faces a 40p in the pound death duty, the other’s zero rated. This doesn’t make sense.
“We want people to make the best investments. It only raises £7bn a year, it should go altogether. It would have a strong economic benefit.
“The VAT threshold should be raised from its current £80,000. Lots of businesses get to March and don’t want to do any more business – small businesses, sole traders – because if they do they suddenly have to put their prices up by 20 per cent.
“That limit should be raised or it should be staggered so that people don’t go from zero to 20 per cent in one fell swoop.
“Corporation tax increased the amount of revenue it took from £34 billion in 2011/13 to £63 billion in 2021/22 as it was slashed. This was tremendously important and had a beneficial effect on receipts and for companies.
“It’s much better to have low rates and few write-offs: George Osborne was right on corporation tax. We should try to get back to that 19p rate.
“Thresholds that have been eaten into by inflation: we should do as much as we can with the money available to try and restore those thresholds. That really should be a priority because that is a genuine cut in income in real terms for people up and down the country.
“This bonfire of taxes will potentially ignite the British economy.”
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