Britain’s Treasury chief raises the minimum wage but angers some colleagues by ruling out tax cuts
Hunt also pledged to freeze civil service recruitment to cut costs and toughen the rules on social benefits in an attempt to stem the flow of working-age people out of the workforce, a trend that has accelerated since the coronavirus pandemic.
Britain’s Treasury chief announced a hike in the national minimum wage on Monday, as the governing Conservative Party tries to persuade voters it is on the side of those who are struggling financially. But Chancellor of the Exchequer Jeremy Hunt ruled out tax cuts, saying they would fuel inflation. “I do want us to have lower taxes,” Hunt told Sky News before his speech. But he said “it’s very difficult to see” it happening this year.
That message was not what many Conservatives at the party’s annual conference wanted to hear. Hundreds of them packed a room to applaud as former Prime Minister Liz Truss —whose seven weeks in office last year plunged Britain’s economy into crisis— demanded Hunt slash taxes in his fall budget next month.
Hunt told conference delegates that the hourly rate for workers 23 or older will rise in April from 10.42 pounds ($12.70) to at least 11 pounds ($13.40). The exact amount will be set after a recommendation by the Low Pay Commission, an advisory body. Hunt said that will mean a raise for more than 2 million workers.
Hunt also pledged to freeze civil service recruitment to cut costs and toughen the rules on social benefits in an attempt to stem the flow of working-age people out of the workforce, a trend that has accelerated since the coronavirus pandemic. “It isn’t fair that someone who refuses to look seriously for a job gets the same as someone trying their best,” he said, in remarks that drew concern from anti-poverty groups.
The party is trying to sprinkle voter-pleasing measures such as the pay increase at the conference, which may be the last before a national election due in 2024. But the government’s spending power is constricted by the U.K.’s sluggish economy and stubbornly high inflation that hit double digits last year and now stands just below 7%. The result was a grab-bag of generally inexpensive policy announcements: a ban on children using cell phones in school, a curb on local authorities slapping " excessive fines on motorists,” a push for “smarter regulation.”
Opponents see a government that has run out of big ideas and a party heading for defeat. The right-of-center Tories, in power since 2010, are lagging far behind the center-left opposition Labour Party in opinion polls. Voters are weary after years of political turmoil over the U.K.’s exit from the European Union, the coronavirus pandemic and a cost-of-living crisis fueled by Russia’s invasion of Ukraine last year.
Prime Minister Rishi Sunak, who took office just under a year ago, is facing grumbling — and even open rebellion — from some Conservative members and lawmakers. Sunak steadied the economy after his predecessor Truss crashed the pound and trashed Britain’s reputation for fiscal prudence with her tax-slashing economic plans. She left office after just 49 days.
Many Conservatives doubt whether Sunak — the party’s fifth leader since 2016 — can restore its popularity to the level that saw the party win an 80-seat majority in the 650-seat House of Commons in 2019. The prime minister then, Boris Johnson, resigned in mid-2022 amid scandals over his ethics and judgment.
In recent weeks, Sunak has sought to take the initiative with a clutch of measures depicted as easing the economic burden on taxpayers. He has delayed a ban on selling new gas and diesel cars and watered down other green measures that he said imposed “unacceptable costs” on ordinary people. Critics say the measures will have little impact on people’s pocketbooks and will make it harder for Britain to reach its goal of cutting greenhouse gas emissions to net zero by 2050 in order to limit climate change.
Hundreds of party lawmakers, activists and officials attending the four-day conference in Manchester, northwest England, are being wooed by rivals to Sunak, positioning themselves for a party leadership contest that could follow election defeat.
Home Secretary Suella Braverman and Business Secretary Kemi Badenoch are both addressing meetings and receptions as they vie for the support of the party’s populist right wing, which wants tough curbs on irregular migration and a war on liberal social values derided as “woke.” Foreign Secretary James Cleverly is popular with more centrist Conservatives. Even Truss, who resigned in disgrace less than 12 months ago, is on hand to offer her opinion, keep her name in the headlines and make life difficult for her successor.
At a packed meeting attended by several high-profile lawmakers on the party’s right wing, Truss, called for everyone to “unleash their inner Conservative” and back a platform of lower taxes, less environmental regulation — including removing a ban on fracking — and a smaller state,
Truss, whose plan for billions in unfunded tax cuts spooked the financial markets last year, got loud applause for her mantra that “government is too big, that taxes are too high and that we are spending too much.” “Let’s stop taxing and banning things,” she said.
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