Sajid Javid reveals his plans to reduce income tax basic rate by 2p in the next Budget as well as cuts to stamp duty and relief for capital investment
- Sajid Javid said he planned a tax cutting plan which included a stamp duty cut
- The former chancellor resigned during the cabinet reshuffle earlier this month
- His remarks will pressure his replacement Rishi Sunak to bring in similar policies
Sajid Javid planned to reduce the basic rate of income tax by 2p in the next budget, he has revealed.
The former chancellor said he planned a tax cutting programme which also included a reduction to stamp duty and relief for capital investment.
Mr Javid resigned during the cabinet reshuffle earlier this month before firing a parting shot at Prime Minister Boris Johnson’s chief aide, Dominic Cummings.
His radical plan, disclosed in an interview with The Times, would have seen the first reduction to the basic rate of income tax for 15 years, from 20p to 18p in the pound from April, at an estimated cost of £10billion a year.
Mr Javid, 50, said he intended to send a ‘huge signal for working people’ that the Government was ‘absolutely on their side’ in next month’s Budget.
Sajid Javid planned to reduce the basic rate of income tax by 2p in the next budget, he has revealed
The interview will put pressure on his replacement, former Treasury minister Rishi Sunak, to include similar tax cutting policies in his own budget, expected on March 11.
Basic rate tax is levied on incomes between £12,501 and £50,000. Some 26 million of the UK’s 31 million taxpayers fall in to this bracket.
The tax cut would have been worth up to £750 a year, with those in the higher tax rates benefiting the most.
Mr Sunak has already faced pressure to scrap reported plans to hike fuel tax in the budget, which would end the ten-year freeze on fuel duty.
In a pointed resignation speech in the House of Commons on Wednesday, Mr Javid criticised the growing influence of Boris Johnson’s senior adviser Dominic Cummings and the danger of higher taxes.
Mr Javid warned that the merging of Treasury and No10 teams ordered by Mr Cummings would stifle debate and was ‘not in the national interest’.
He also predicted that the Tories would wreck their reputation for economic competence and damage Britain’s public finances if a budget spending spree resulted in higher taxes.
And in an apparent reference to Mr Cummings, he added: ‘Now I don’t intend to dwell further on all the details and the personalities… the comings and goings if you will.’
Mr Javid quit after refusing No10’s demand to sack all of his advisers and work with a ‘joint’ team based in No10.
Mr Javid said that he did not know if any of his proposals will be retained by Mr Sunak, but his intervention puts pressure on the chancellor to prioritise tax cuts.
The interview will put pressure on his replacement, former Treasury minister Rishi Sunak, to include similar tax cutting policies in his own budget, expect on March 11
He said he would have paid for the tax cuts partly through a Whitehall waste-busting drive, and said he had ‘killed off’ plans for a mansion tax.
Other measures in the pipeline included proposals for a network of fast-charging points for electric cars and help for the five million adults lacking basic literacy and numeracy skills with a ‘right to retrain’.
He said the Prime Minister’s plans will cost £100billion in extra day-to-day spending over the next five days, and warned he must be careful not to break borrowing rules.
Combined with the £100billion planned in capital spending, Mr Javid said Mr Johnson’s programme amounts to the ‘biggest fiscal expansion in peacetime’.
Mr Javid again criticised those in Downing Street who ‘want No10 to control the Treasury’.
Commenting on his resignation Mr Javid said it was a ‘black and white’ decision to quit rather than being ‘humiliated’ by sacking his aides.
He said a number of colleagues congratulated him on his defiant Commons speech: ‘I had text messages from a number of cabinet ministers and ministers saying “well done”.
‘One of them said: “Thank you for speaking on behalf of all of us.”
A Treasury spokesman refused to comment but a Treasury source told The Times: ‘The former chancellor’s Budget was characterised by tens of billions of tax rises, including a mansion tax and steep council tax rises, not tax cuts.
‘His scorecard never balanced the cost of a 2pm tax cut.’