Jeremy Hunt is facing the biggest pressure to date to cut taxes in his Budget, after the largest Tory MP faction demanded he deliver for hardworking people.
The One Nation caucus of Conservative MPs, which boasts 107 members and dwarfs other groups, has issued its list of demands to the Chancellor ahead of the March 6 fiscal event.
Damian Green, chairman of the One Nation group, has set out eight policy demands that the group will support, including pleas for “popular and pragmatic policies that put money back into everyone’s back-pocket”.
With the Chancellor still making up his mind about how to spend the £16 billion of surplus headroom he has to play with, Tory MPs are busy lobbying for their preferred tax cuts.
The One Nation group say they want a focus on direct taxes, indicating little support for some MPs’ demands that he slash inheritance tax.
Mr Green blasts suggested cuts to the so-called ‘death tax’, saying such a move would mean prioritising the “most wealthy”.
Instead, Siobhan Aarons, the group’s national chair, flags cuts to national insurance and income tax as those cuts best placed to help hard-pressed voters during the ongoing cost of living squeeze.
The One Nation group also signals an openness to raising taxes on dividends, which are currently taxed at a much lower rate to income tax.
Such a move would personally hit the Prime Minister, after his tax return earlier this month revealed he paid an effective tax rate of just 23% on his £2.2 million income.
At the time, the hard-left Trade Union Congress said: “It really is a mystery why Rishi Sunak raised income tax but not capital gains tax”.
Among the other demands from the One Nation Caucus are calling for a multi-year settlement for childcare funding; reducing the strain on graduates by guaranteeing their student loan interest rates are no higher than the commercial average; and taxing foreigners who keep their luxury flats vacant.
The group also focuses many of its demands on housing, with calls to reward local councils who build and sell 100% of their targets over the next four years.
The 107-strong group also wants stamp duty abolished for those buyers who are downsizing, and allowing first-time buyers to put up 25% of their tax-free pension savings into the deposit for their first-time home.
Wimbledon MP Stephen Hammond said homeownership must be “at the heart of the Conservative Party”, and demanded Mr Hunt help “end the struggles that hard-working people face to get onto the housing ladder”.
Damian Green warned that the Budget is the Tories’ chance to properly demonstrate they are on the side of voters ahead of the election.
He warned that a failure to deliver in a fortnight risks “the damaging consequences of a Labour government”.
“This is our chance to demonstrate to voters that we are on their side and that we are taking steps to alleviate pressures they face in all aspects of everyday lives.”
