David Cameron has ruled out “significant” tax cuts while the Government is cutting spending to reduce the deficit.
The Prime Minister said he wanted to offer people “relief”, but suggested that would only be possible “at the end of this hard road”.
His comments came in an interview with The Sunday Telegraph ahead of the March 23 Budget.
Chancellor George Osborne is facing calls to reduce the burden on hard-pressed voters as inflation spirals. Tory Mayor of London Boris Johnson urged him last month to set out “a clear direction of travel” on how taxes could be reduced.
But Mr Cameron insisted there was no “Plan B” on the coalition’s deficit-reduction strategy and said tax cuts would only undo the work of painful curbs in public spending.
“I would love to see tax reductions. I’m a tax-cutting Tory and I believe in tax cuts, but when you’re borrowing 11% of your GDP, it’s not possible to make significant net tax cuts. It just isn’t,” he said.
“It’s no good saying we’re going to deal with the deficit by cutting spending, but then we’re going to make things worse again by cutting taxes. I’m afraid it doesn’t add up.”
Later in the interview, he added: “Do I want to see, at the end of this hard road, relief and lower taxes for hard-working people? Yes I do.”
It was also reported today that Mr Osborne was considering a new tax levy on wealthy “non-doms” which could be announced as early as the Budget.
The move would help fund the coalition’s commitment to raise the income tax threshold to £10,000.