Chancellor Rishi Sunak has agreed to tie his own hands at next month’s Budget by sticking with the Conservatives’ “triple tax lock”, which stops him raising the rates of income tax, national insurance or value added tax.
Treasury officials had hoped Mr Sunak would ditch the Tories’ 2019 election manifesto commitment, which stops him using the three biggest tax levers to start curbing a deficit that is expected to top £400bn in 2020-21 because of the coronavirus crisis.
Instead, Mr Sunak has agreed with Boris Johnson that the triple tax lock must be maintained, according to government insiders — a move that could force him to seek increases in other taxes, including corporation tax and possibly capital gains tax.
“To go back on the manifesto pledge would be a betrayal of trust — pandemic or no pandemic,” said one aide to the chancellor. “It was a very significant pledge at the last election.”
One cabinet minister added: “Boris feels he owes it…