UK Treasury chief signals prioritizing cutting inflation, not taxes

By Burak Bir

LONDON (AA) - The best tax cut is a cut to inflation, said Britain's Treasury chief on Friday, adding that this is the "only sustainable way to restore industrial harmony."

Speaking at Bloomberg headquarters in London about his plans to grow the economy, Chancellor of the Exchequer Jeremy Hunt said that they need to make Brexit "a catalyst for bold choices."

He said that enterprise, education, employment, and everywhere are the four E’s for economic growth and prosperity.

"If we're to be Europe's most prosperous economy, we need to have quite simply its most dynamic and productive companies," added Hunt.

Saying that even after recent tax rises, Britain has one of the lowest levels of business tax as a proportion of GDP among major countries, he ruled out a tax cut, saying "the best tax cut right now is a cut in inflation."

This is the "only sustainable way to restore industrial harmony," he added.

"Over 100,000 people (are) leaving school every year, unable to reach the required standard in English and math," underlined Hunt, pointing to the government's plan to prioritize the teaching of math until 18.

Saying that high employment levels have long been a strength of the UK's economic model, Hunt stated that since 2010, they have seen a record employment rate and the lowest unemployment in nearly 50 years.

"We are at 76% employment levels, higher than Canada, the US, France or Italy, but the pandemic has exposed weaknesses in our model. Total employment is nearly 300,000 people lower than pre pandemic with around one-fifth of working age adults economically inactive," he added.

Citing data showing that every region in the country has seen pay grow faster than London since 2010, Hunt said this is a sign that the government's approach to regional growth is working.