Short-term measures would include a new support package worth up to £5billion to help defray the cost of energy bills. Furthermore, he adds: “I have in mind a further significant reduction in fuel taxes – temporary, short term. Because I think it’s also one of the biggest costs people face in business.
But, Mr. Javid continues: “The government cannot prevent the impact of sharp price increases on everyone. You can’t tone it all down.
“The long way out of this, the best way, is to stimulate growth. I have always believed in free markets, low taxation, light regulation, as necessary conditions for growth.
“It was true 20 or 30 years ago, it was true under Margaret Thatcher, and it’s true now, because that’s how economies grow and work.”
Current levels of taxation, says Mr. Javid, are “seriously hampering growth”. “And if you don’t do something about it now, very quickly you’ll find that you’re stuck at a very low growth rate and you won’t be able to meet the demands of what the British people expect from public services.. .and it will really affect the standard of living in the long run.
“The prerequisite for growth is lower taxes”
In a thinly disguised attack on Mr Sunak, he adds: “Our tax rate is now already at its highest in almost 70 years – and that happened under the Tories. I think that bothers a lot of people. And so I think a prerequisite for growth is tax cuts.
“Some say you can’t have tax cuts until there’s growth. I think that’s wrong. I think this is a fundamentally flawed analysis. I think you can’t have growth until you have the tax cuts.
So far, Mr Javid has ignored the elephant in the room: the hike in the National Insurance, or Health and Social Care Tax, introduced by Mr Sunak and publicly backed by the Health Secretary of the time as a way to pour money into an NHS struggling to cope with Covid backlogs.
Regarding his plans for longer-term tax changes, he says, “I would scrap the health and social care tax.
“It’s a 1.25% levy on income and I think it’s something that’s not necessary. I don’t think we need it anymore. And I think that complicates the tax system.
Asked to explain his extraordinary change of heart since advocating the move since September last year, Mr Javid said: ‘When I was health secretary I was not chancellor. It wasn’t my job to figure out exactly how to pay for that.
“It was my job to define what the health and welfare reforms are going to require and to make sure the cost is as low as possible for what we want to deliver.
“When the Treasury came back with how they wanted to fund it, I understood that. I’m not sure I would have done it if I had been Chancellor, but I was focused on my job and I didn’t. don’t try to do other people’s work for them.
How would Mr Javid have funded the extra £12billion a year for health and social care?
“This margin that we get from existing taxes, without having new taxes, was enough,” he says. “I would have earmarked the revenue we had to raise from existing taxes to prioritize health and social services.”
Advance the planned tax cut by 1 pence
Mr Javid’s plans also include bringing forward the planned 1p income tax cut from 2024-25, lowering the basic rate from 20p to 19p from next year ‘to help to growth, to help people with their income”.
He would also drop a planned corporate tax increase from 19% to 25% from next year, announcing the move immediately to end speculation about the proposals which he says “clamp investment companies and force international companies to think again”. over Brittany.
Mr Javid would go further, returning to George Osborne’s policy of cutting corporation tax every year, saying: “I thought that was an excellent policy. It sends a very strong signal to businesses about post-Brexit Britain and the kind of country we want to be. We should lower taxes, not raise them. »
Mr Javid, who voted to stay in the 2016 referendum but has since declared himself a full convert to the cause of Brexit, said that since Brexit, under Mr Johnson’s government, ‘we have actually become more European, rather than less European” – citing the size of the state and the level of intervention in people’s lives.
“I would set a glide path again, to bring corporate tax down to 15%,” he says. It would be the lowest corporate tax in the G20. “I think that would be a huge call to businesses around the world about what kind of country we want to be and how we’re going to generate wealth.”
Mr Javid points to his decision to bring quangos such as Health Education England into the NHS as an example of how Whitehall could achieve the cost savings needed to fund his entire plan. The ‘static cost’ of his tax plans would be £39billion, he says, but in reality ‘it will be much less’, due to the additional revenue that would be generated by attracting more investment to Britain. “When George Osborne started cutting corporation tax, revenues actually grew year on year. It hasn’t gone down. »