(Bloomberg) -- UK Chancellor of the Exchequer Jeremy Hunt was told to cut taxes at a meeting with rank-and-file Conservative MPs on Tuesday, after the International Monetary Fund offered a bleak forecast of the UK’s economic outlook.
Long-standing Tory MP Edward Leigh told Hunt he should include tax cuts in his upcoming budget on March 15, airing an opinion popular among more Conservative MPs, according to two people present at the meeting who spoke on condition of anonymity. Hunt was also pressed on whether he will hike fuel duty — saying only that he will have to assess the nation’s finances at budget time.
Nevertheless, the consensus in the room was that tax cuts need to wait until inflation is brought under control, said Conservative MP David Simmonds, who was also present at the meeting of the 1922 committee, a regular forum for Tory MPs not serving in government to share their views. There were approximately 40 people present out of the total of 355 Conservative MPs.
Hunt has so far resisted calls from his party to reduce Britain’s tax burden, which is at its highest since World War II, arguing that his priority is to first curb inflation. In a speech last Friday, Hunt said the UK doesn’t have the headroom for major cuts — and if there is any, he would focus on business tax cuts to boost investment.
Hunt’s meeting with the Tory MPs came after the IMF warned that Britain faces the bleakest two years of any major industrial nation, with a recession in 2023 and the slowest growth of peers in 2024.
The Washington-based institution downgraded its UK outlook by 0.9 percentage points from October, saying higher interest rates and taxes along with government spending restraint will exacerbate a cost-of-living crisis.
--With assistance from Kitty Donaldson.
©2023 Bloomberg L.P.
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