A U.K. Surplus at Last! Time for Tax Cuts Says Rees-Mogg
Following UK’s first budget surplus in 16 years, lawmaker Jacob Rees-Mogg wants a tax cut for higher earners.
(Bloomberg) -- On the day the U.K. reported its first current-budget surplus in 16 years, some predictably called for an end of austerity. Jacob Rees-Mogg wants a tax cut for higher earners.
The Conservative lawmaker, best known for his fervent pro-Brexit beliefs, is a former fund manager and a millionaire. In his view, Prime Minister Theresa May should take a leaf out of the U.S. president’s book.
He said those paying 40 percent tax on earnings between 46,351 pounds ($64,719) and 150,000 pounds a year have suffered “fiscal drag” as the nation taxes its citizens “at highs not seen since the late 60s and early 70s.”
“What you do when you cut taxes, as we’ve seen with corporation tax, is raise more money so you end up having a stronger economy, greater economic growth and more tax revenues,” he said in an interview in the House of Commons on Tuesday. “I’m very intrigued by what Donald Trump has done with his tax cuts and it’ll be interesting to see how they affect the economy.”
U.K. Chancellor Philip Hammond faced further calls to end more than seven years of belt tightening, after figures Tuesday showed the government back in balance on its day-to-day budget for the first time since one-time Labour leader Tony Blair was prime minister.
Labour Pushback
That will reignite debate about whether to ease austerity by increasing public spending -- as the main opposition Labour would want -- or to cut taxes in line with proponents of supply-side economics. With the country navigating Brexit, economic growth remains sluggish as the Bank of England mulls whether the country can withstand a second interest-rate rise.
Rees-Mogg’s traditionally Tory views put him at odds with Jeremy Corbyn, who has taken Labour on a more radical socialist path and wants more spending on government projects. A former banker and founder of an asset-management company, Rees-Mogg lives in a manor house and his mother-in-law lives in a stately home.
Peter Dowd, Labour’s Shadow Chief Secretary to the Treasury, said Rees-Mogg’s remarks were “very worrying”, particularly as some consider him a future leader of the Conservative Party.
The government has already handed “billions of pounds in tax giveaways to large multinationals and the super-rich,” Dowd said in a text message. “It would be fairer if he called on his prime minister to end the unjust austerity measures hitting working people in this country and undermining economic growth.”
To contact the reporters on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net, Jessica Shankleman in London at jshankleman@bloomberg.net.
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Tony Czuczka
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