Tory leadership contender Javid toys with scrapping top rate of income tax
Tory leadership hopeful Sajid Javid has said he would consider scrapping the top rate of income tax in a bid to boost the economy.
Speaking to the Sunday Telegraph, Mr Javid said: “I’m a low tax person,” adding: “I think [cutting taxes] can pay for itself, it leads to more dynamism in business.”
Mr Javid points to George Osborne’s move to cut the top rate of tax from 50p to 45p, which saw tax revenues increase.
“If it can be demonstrated that a further cut in the additional rate can raise more taxable revenues that should be looked at,” he said.
Meanwhile, his leadership rival Michael Gove is said to be prepared to delay Brexit until the end of next year rather than leave without a deal on October 31.
A source close to Mr Gove told the Telegraph: “Simply trying to go for no deal before the UK is properly prepared will lead to a general election with Jeremy Corbyn in Downing Street and risks Brexit being cancelled altogether.”
Mr Javid said he would step up planning for a no-deal Brexit if he becomes the next prime minister, but said Parliament would do everything to try and stop no deal as an outcome.
He said his “absolute focus” would be on getting a deal, but added he would focus on mitigating the effect of no deal on the economy if he was unable to reach an agreement with the EU.
“I would prepare for a no-deal Budget, which would include a significant amount of economic stimulus,” he says.
“That would include significant tax cuts for business, for personal income, it would include stepped up infrastructure investment.”
Mr Javid – the son of a Pakistani bus driver – is trying to position himself as someone who can win over both traditional Tory supporters and new voters.
“My background, my own story allows me to connect in a very special way with the vast, vast majority of the electorate,” he said.
He added: “I think Britain over many decades has changed into what I would easily call the most successful, multi-racial democracy in the world.
“So I don’t personally feel that [my ethnicity] is an impediment in any way.”
Others in the leadership race promising tax cuts to boost their appeal include Dominic Raab and Jeremy Hunt.
Mr Raab has pledged to cut income tax by a penny a year – 5p over the course of a Parliament to just 15p in the pound for the basic rate – which critics have claimed would cost £25 billion.
Mr Hunt, on the other hand, is using tax cuts to woo businesses, suggesting slashing corporation tax to Irish levels of 12.5% from the 19% it sits at currently.
Chancellor Philip Hammond expressed his concern over too many pledges to cut taxes.
Writing in the Sunday Telegraph, he said: “If we are tempted down this route, we abandon one of our party’s proudest achievements and most enduring hallmarks: fiscal responsibility.
“And then, when the next General Election comes, we will find ourselves standing naked in front of a Labour Party which knows no fiscal discipline at all and will always outbid us in a war to borrow the most.”