Why the government is planning a tax raising Budget

Tory activists are in uproar this morning over varying reports of tax raising measures Boris Johnson and Sajid Javid are considering for next month’s Budget. Plans currently being mooted include cuts to pension tax relief and the introduction of a recurring property tax that could replace stamp duty. Critics have been quick to say that neither proposal fits with what the Tory party traditionally claims to want to do – rather than new taxes and limits Johnson ought to be pushing for tax cuts.

However, the view in both No. 10 and No. 11 is that this is the year for tough – and potentially unpopular – decisions. Given the Conservative party won’t be heading to the polls for another four years, there’s a sense in the upper echelons of government that now is the best time to do something radical. As I reported earlier this month, the Treasury is looking at tax-raising measures that will allow Javid to stick to his fiscal rules and deliver Johnson’s agenda.