As the government presses ahead with its deficit reduction strategy, Prime Minister David Cameron has ruled out significant tax cuts.
He said that he wanted to offer people relief but said it would only be possible “at the end of the hard road.”
He also stated that the coalition government had no “plan B” on the deficit reduction strategy and said that tax cuts would undo the painful cuts in public spending.
He said: “I would love to see tax reductions. I’m a tax-cutting Tory and I believe in tax cuts, but when you’re borrowing 11% of your GDP, it’s not possible to make significant net tax cuts. It just isn’t,” he said. “It’s no good saying we’re going to deal with the deficit by cutting spending, but then we’re going to make things worse again by cutting taxes. I’m afraid it doesn’t add up.”
Meanwhile Chancellor George Osborne is reportedly considering a tax levy on non domiciles which could help fund the commitment to raise the tax free threshold to £10,000.