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The Chancellor Jeremy Hunt has put workers on salaries of £100,000 plus at the top of his list of priorities should the Conservatives win the election.
Mr Hunt, who is among a group of prominent MPs who face a fight to keep their seats, ran into trouble earlier this year when he suggested a six-figure salary “was not huge”.
Now, he has signalled he would be keen to change the tax and benefits system to help out this group, who make up a significant slice of people in his own Surrey constituency.
Mr Hunt has already outlined plans for changes to Child Benefit to allow any household with an income up to £120,000 to qualify for payments.
Currently, the full benefit of Child Benefit is only available to households where a single earner is on less than £60,000, while it is phased out if the income is above that level and effectively disappears completely at £80,000.
However, he is now suggesting that he would like to see other changes to the tax regime that appear designed to appeal to the core Tory vote and head off the threat from Nigel Farage’s Reform UK party.
One area Tory MPs have been pushing is to expand the generosity of free childcare, now available for 15 hours a week for two-year-olds.
Currently, this cannot be claimed if one person in a household earns more than £100,000. This means a family where one parent earns £101,000 cannot claim, but a household with two parents both earning £99,000 can.
Mr Hunt told the Sunday Times: “Around here (Godalming) the childcare reforms have been pretty popular, but people also do raise the fact that one person earning over £100,000 means you don’t get access to them and that creates a cliff edge.
“Because it was a big commitment (in the budget) we just couldn’t afford to do more when I made the original announcement. But those are things I think we definitely want to make progress on, yes.”
Even more significantly, Mr Hunt suggested that he wants to chip away at the 60 percent marginal tax rate for people earning six figures. Under the personal allowance taper rate, people lose £1 for every £2 they earn above £100,000.
He said: “I’ve always said that if you want to be economically productive we have to get rid of the cliff edges in the tax system.”
Mr Hunt added: “The removal of the personal allowance, the fact that childcare support stops when one person in a household is earning over £100,000.
“If you speak to economists, they will say the most damaging things in the tax system are when you have things with a high marginal rate. So it is absolutely on our list as something we would like to do more on.”
If these measures appear in the manifesto, they may be popular with core Tory voters but they will also prompt more questions about the party’s spending plans and how Hunt intends to pay for them.
Economists have warned that the main parties are not being honest about the difficult choices ahead, having ruled out raising all the big taxes.
To compound matters, whoever wins will also quickly have to deal with a fresh wave of wage demands across the public sector.
The Tories plan to limit departmental budget real-terms increases to one per cent from 2025 onwards, meaning they will not be able to afford significant pay rises for junior doctors, teachers, nurses or the police.
He argued Labour will find it difficult to manage public pay rises “because of their links to the unions”, and this is why “we are so certain” that the party will put up taxes.
