Britain’s Treasury chief raises minimum wage, rules out tax cuts

Chancellor of the Exchequer Jeremy Hunt arrives on stage to deliver his keynote speech to the Conservative Party annual conference in Manchester, England, Monday Oct. 2, 2023. (Stefan Rousseau/PA via AP)

MANCHESTER, England  — Britain’s Treasury chief announced a hike in the national minimum wage Monday, as the governing Conservative Party tries to persuade voters it is on the side of workers who are struggling financially.

But Chancellor of the Exchequer Jeremy Hunt ruled out tax cuts, saying they would fuel inflation.

“I do want us to have lower taxes,” Hunt told Sky News before giving a speech at the party’s annual conference. But he said “it’s very difficult to see” it happening this year.

That message was not what many Conservatives at the party’s conference in Manchester wanted to hear. Hundreds of them packed a room to applaud as former Prime Minister Liz Truss — whose seven weeks in office last year plunged Britain’s economy into crisis — demanded Hunt slash taxes in his fall budget next month.

Hunt told conference delegates that the hourly rate for workers 23 and older will rise in April from 10.42 pounds ($12.70) to at least 11 pounds ($13.40). The exact amount will be set after a recommendation by the Low Pay Commission, an advisory body, but Hunt said more than 2 million workers will see pay increases.

Hunt also pledged to freeze civil service recruitment to cut costs and to toughen the rules on social benefits in an attempt to stem the flow of working-age people out of the workforce, a trend that has accelerated since the coronavirus pandemic.

READ: Hunt, hemmed in by debt, set to focus on growth in UK budget

“It isn’t fair that someone who refuses to look seriously for a job gets the same as someone trying their best,” he said, in remarks that drew concern from anti-poverty groups.

Gov’t spending power tighter

The party is trying to sprinkle voter-pleasing measures such as the minimum wage increase at the conference, which may be the last before a national election due in 2024. But the government’s spending power is constricted by the U.K.’s sluggish economy and stubbornly high inflation that hit double digits last year, and now stands just below 7 percent.

The result was a grab-bag of generally inexpensive policy announcements: a ban on children using cellphones in school, a curb on local authorities slapping “ excessive fines on motorists” and a push for “smarter regulation.”

Opponents see a government that has run out of big ideas and a party heading for defeat. The right-of-center Tories, in power since 2010, are lagging far behind the center-left opposition Labor Party in opinion polls.

Voters are weary after years of political turmoil over the U.K.’s exit from the European Union, the pandemic and a cost-of-living crisis fueled by Russia’s invasion of Ukraine last year.

Prime Minister Rishi Sunak, who took office just under a year ago, is facing grumbling — and even open rebellion — from some Conservative members and lawmakers.

Sunak steadied the economy after his predecessor Truss crashed the pound and trashed Britain’s reputation for fiscal prudence with her tax-slashing economic plans.

But many Conservatives doubt whether Sunak, the party’s fifth leader since 2016, can restore its popularity to the level that saw the party win an 80-seat majority in the 650-seat House of Commons in 2019. The prime minister then, Boris Johnson, resigned in mid-2022 amid scandals over his ethics and judgment.

In recent weeks, Sunak has sought to take the initiative with a clutch of measures depicted as easing the economic burden on taxpayers. He has delayed a ban on selling new gas and diesel cars and watered down other green measures that he said imposed “unacceptable costs” on ordinary people.

Easing taxpayers’ burden

Critics say those moves will have little impact on people’s pocketbooks and will make it harder for Britain to reach its goal of cutting greenhouse gas emissions to net zero by 2050 in order to limit climate change.

READ: British workers get a better deal

Hundreds of party lawmakers, activists and officials attending the four-day conference in Manchester, northwest England, were being wooed by rivals to Sunak, positioning themselves for a party leadership contest that could follow election defeat.

Home Secretary Suella Braverman and Business Secretary Kemi Badenoch both addressed meetings and receptions as they vied for the support of the party’s populist right wing, which wants tough curbs on irregular migration and a war on liberal social values derided as “woke.” Foreign Secretary James Cleverly courted more centrist Conservatives.

Even Truss, who left office in disgrace after 49 days, was on hand to offer her opinion, keep her name in the headlines and make life difficult for her successor.

At a packed meeting attended by several high-profile lawmakers on the party’s right wing, Truss, called for everyone to “unleash their inner Conservative” and back a platform of lower taxes, less environmental regulation — including removing a ban on fracking — and a smaller state,

The crumbling state of the nation’s railways cast a shadow over the conference and provided an easy metaphor for the Conservatives’ critics. Some delegates and journalists had travel plans upended by a train drivers’ strike.

Hunt acknowledged he’d flown the 160 miles (260 kilometers) from London to conference host city Manchester because his train was canceled.

The government failed to dampen reports that it planned within days to scrap a big chunk of an overdue, over-budget high speed rail line designed to link London with the north of England.

While the government denies a final decision has been made, it’s widely expected to announce that the High Speed 2 line will be halted at Birmingham in central England rather than its previously planned destination: Manchester.

Manchester Mayor Andy Burnham accused the Conservatives of treating people in the north like “second-class citizens.”

“This will be remembered as the conference when they pulled the plug on us,” he said.