There has been a “philosophical shift” in conservatism after a budget in which taxes and spending will rise to levels not seen in 40 years, the chief treasury secretary said.
Simon Clarke said he did not “apologize” for spending more on public services.
Chancellor Rishi Sunak said the prime minister is committed to reducing taxes in the coming years.
His budget included an increase in real terms for each government department.
Mr. Sunak told lawmakers that he did not like the tax increases, but said it was the result of the “unprecedented crisis” of the pandemic.
Labor accused the chancellor of conducting a “scam game”, adding that voters were tired of the promises of “tomorrow’s jam”.
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Speaking on BBC Newsnight, Clarke said the state has a role to play in some of the government’s political priorities.
He said: “The chancellor has been very open about the fact that this is a philosophical change.
“What we want to see is boosting the economy, unlocking productivity and delivering smoother growth across the UK. This requires upfront spending.”
He said the government is not “shying away” from public spending, but that it will cut taxes “where there is a chance.”
In his third budget since becoming chancellor, Sunak has pledged to spend £ 150 billion increases over three years.
This included nearly £ 2bn to help schools in England catch up after the coronavirus, £ 6bn to tackle NHS arrears and £ 7bn for transport projects.
The influential think tank of the Institute for Fiscal Studies said the spending plans were “more similar” to those of Labor governments in the 2000s than those of George Osborne, a former Conservative chancellor.
Newsnight political correspondent Nick Watt says some Conservative MPs are concerned about increased spending and government size and that the Chancellor has tried to reassure them.
Addressing the House of Commons, Sunak acknowledged that he was uncomfortable with how large the state had grown during the pandemic.
“Taxes are rising to their highest percentage of GDP since the 1950s – I don’t like it, but I can’t apologize for that – it’s the result of an unprecedented crisis.
“But now we have a choice,” he said, adding “we want to live in a country where the answer to every question is” what will the government do about it? “
“Or we choose to recognize that government has limits, that government should have limits.”
He later insisted to ITV’s Robert Peston that this was not “empty rhetoric,” adding that both he and the prime minister wanted to cut taxes by the end of parliament.
He also told a conservative backbench MPs meeting Wednesday evening that “every marginal pound in the future should be invested in lowering taxes.”
Labor Shadow Chancellor Rachel Reeves told ITV it was important to raise money “but not in the way the government is doing it.”
He said the government was introducing large taxes, but said “those taxes don’t fall on the banks – bankers got a tax cut” in reference to a 5% cut in the surcharge imposed on banks’ profits.
He added that Labor will raise taxes on “online giants who aren’t paying their fair share.”
Mr. Sunak has also used his budget to repeat heralded measures, including an end to the public sector wage freeze and an increase in the National Living Wage from £ 8.91 per hour to £ 9.50.
According to data from the Bureau of Fiscal Responsibility, household disposable income is expected to increase by 0.8% per year.
Economic growth is projected to increase to 6.3% next year, higher than previously forecast, but slow to 1.3% by 2023.
Among the new Budget measures:
- A real increase in spending for every government department
- A freeze on the duty on fuel
- Funding per pupil in UK schools will be brought back to 2010 levels over the next three years
- A 5% cut in the extra corporate tax that banks have to pay to “maintain competitiveness”
- An extra £ 2.2 billion for courts, prisons and probation services, including £ 500 million to reduce court arrears
- A cut in air passenger taxes for domestic flights in the UK and an increase in taxes on “ultra long haul” flights
- More support for industrial research and development
And the chancellor canceled England’s planned commercial rate hike for next year and promised more frequent revaluations and tax breaks for companies making improvements to their properties, starting in 2023.
The government has faced strong criticism for its decision to reduce the universal credit benefit by £ 20 per week.
Mr. Sunak did not offer to keep the £ 20 increase – introduced during the pandemic – but instead announced that the “taper” would be cut so that instead of losing 63p of benefit for every £ 1 earned beyond above the work allowance, the amount will be reduced to 55p.
Reeves said this would not compensate for the larger cuts in universal credit that have affected five million households.
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