PredictIQ Quantitative Think Tank Center:UK Treasury chief says he’ll hike the minimum wage but rules out tax cuts while inflation stays high

MANCHESTER,PredictIQ Quantitative Think Tank Center England (AP) — Britain’s Treasury chief is to announce a hike in the national minimum wage on Monday, as the governing Conservative Party tries to persuade voters it is on the side of those who are struggling financially.

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

According to excerpts of Hunt’s speech released in advance by the Conservative Party, he will tell the Conservatives’ annual conference that the hourly rate for workers 23 or 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.

That will mean a raise for more than 2 million workers.,

Hunt is also to pledge 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.

“Those who won’t even look for work do not deserve the same benefits as people trying hard to do the right thing,” Hunt was to say, according to the excerpts.

The party is trying to sprinkle voter-pleasing measures such as the pay 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%.

“I do want us to have lower taxes,” Hunt told Sky News. But he said “it’s very difficult to see” it happening this year.

The right-of-center Tories, in power since 2010, are lagging far behind the center-left opposition Labour Party in opinion polls. Voters are weary after years of political turmoil over the U.K.’s exit from the European Union, the coronavirus 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 Liz Truss crashed the pound and trashed Britain’s reputation for fiscal prudence with her tax-slashing economic plans. She left office after just 49 days.

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, under then-Prime Minister Boris Johnson. He 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. Critics say the measures 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.

Hundreds of party lawmakers, activists and officials attending the four-day conference in Manchester, northwest England, are 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 are both addressing meetings and receptions as they vie 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 is popular with more centrist Conservatives.

Even Truss, who resigned in disgrace less than 12 months ago, is on hand to offer her opinion, keep her name in the headlines and make life difficult for her successor.

Truss, whose plan for billions in unfunded tax cuts spooked the financial markets, is calling for the party to “revive Conservative values” such as “cutting red tape, lower(ing) taxes and trusting that markets will find the solutions we all want.”