Tougher rules on benefits and a boost to the national living wage will form part of a Tory plan to get more people into work, Jeremy Hunt will say.
The Chancellor will use his speech at the Conservative Party conference to promise the national living wage will increase to at least £11 an hour from April.
But alongside that he will look again at the benefit sanctions regime to make it harder for people to claim welfare while refusing to take ‘active steps’ to move into work, with proposals due to be set out in November’s Autumn Statement.
The plans to make work pay come as the Tory party is embroiled in a row over tax policy, with Cabinet minister Michael Gove pushing for cuts before the election to help working households.
Mr Hunt has insisted that tax cuts in the Autumn Statement are unlikely, with the focus on reducing inflation, but the Tories are likely to have a full Budget in the spring before any election in 2024 which could provide an opportunity for a giveaway to woo voters.
Mr Hunt this morning said it is ‘not the right time’ for tax cuts as they would fuel inflation.
Asked how the Conservatives can win the next election without slashing taxes, the Chancellor told GB News: ‘The way you win elections is by making promises that people believe. And we are being very honest with people, there is no shortcut to tax cuts.
‘We’ve got to be more efficient with the way we spend taxpayers’ money and I’ll be talking about that today.
‘If I gave a big tax cut this year, it would be inflationary because you’d be putting money in people’s pockets which would boost up demand, which would ultimately mean prices go up as well. So this is not the right time.
‘But as a Conservative, do I want to bring down taxes? Yes, I do. And what I’ll be saying is we’re prepared to take the tough and difficult decisions for the long term that mean that we do have a lower taxed economy and with Rishi Sunak you have a leader who doesn’t shy away from those difficult decisions.’
He also appeared to rule out slashing inheritance tax as he stressed no tax cuts are currently possible.
Asked about a potential cut to death duties, the Chancellor told GB News: ‘I’m basically saying that I don’t think it’s going to be possible to do any big tax cuts.
‘On the basis first of all of the public finances as we see them because our debt interest payments have gone up a lot, but also because it would compromise our battle against inflation.’
Pressed again on whether he was ruling it out, he said ‘no tax cuts are possible in a substantial way at the moment’.
‘It’s not just inheritance tax, it’s income tax, it’s all the different taxes that people look at.’
In other developments at the Manchester conference, Education Secretary Gillian Keegan will set out plans to ban mobile phones from classrooms in England, with a source telling the Daily Mail she believes the devices ‘pose a serious challenge in terms of distraction, disruptive behaviour and bullying’.
Former prime minister Liz Truss will also call for tax cuts, fracking and measures to boost housebuilding in a bid to put pressure on Rishi Sunak from the Tory right.
Business Secretary Kemi Badenoch, seen as a potential successor to Mr Sunak, will use her conference speech to stress her Brexiteer credentials and accuse critics of seeking to talk down the UK.
The main speech at the conference will be from Mr Hunt, who will confirm plans to boost the wages of the lowest paid on the second day of the Manchester gathering.
The Conservatives said the move will benefit two million people and follows the target for the national living wage to reach two-thirds of median hourly pay by October next year.
The Low Pay Commission estimates the rate required to meet that goal should be between £10.90 and £11.43, with a central estimate of £11.16.
The increase will mean the national living wage will increase by over £1,000 for a full-time worker next year.
The Prime Minister said: ‘We’re sending a clear message to hard-working taxpayers across the country: our Conservative Government is on your side.’
Mr Hunt and Work and Pensions Secretary Mel Stride are expected to use November’s Autumn Statement to set out tough welfare reforms.
‘I am incredibly proud to live in a country where, as Churchill said, there’s a ladder everyone can climb but also a safety net below which no-one falls,’ Mr Hunt will say.
‘But paying for that safety net is a social contract that depends on fairness to those in work alongside compassion to those who are not.
‘That means work must pay, and we’re making sure it does. From last year, for the first time ever, you can earn £1,000 a month without paying a penny of tax or national insurance.
‘But since the pandemic, things have being going in the wrong direction. Whilst companies struggle to find workers, around 100,000 people are leaving the labour force every year for a life on benefits.
‘As part of that we will look at the way the sanctions regime works. It is a fundamental matter of fairness.
‘Those who won’t even look for work do not deserve the same benefits as people trying hard to do the right thing.’
In her conference speech, Ms Keegan is expected to announce the ban on mobile phones.
A Government source told the Mail: ‘It is one of the biggest issues that children and teachers have to grapple with so she will set out a way forward to empower teachers to ban mobiles from classrooms.’
Some schools already ban the use of the devices but Ms Keegan is expected to order them to outlaw phones both during lessons and in break times.
On the conference fringe, Ms Truss will address a rally with a focus on boosting growth – a key theme of her short-lived premiership a year ago.
‘There is no reason we cannot go into the next election with a platform that is proudly Conservative,’ she will say. ‘Let’s stop taxing and banning things, and start producing and building things.’
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