David Cameron has ruled out significant tax cuts while the government is cutting spending to reduce the deficit.
In an interview with The Sunday Telegraph, the prime minister said he wanted to offer people relief, but suggested that would only be possible "at the end of this hard road".
The Chancellor, George Osborne, has been facing calls to reduce the burden on hard-pressed voters as inflation spirals ahead of the Budget on 23 March. The Tory mayor of London, Boris Johnson, has urged him to set out how taxes could be reduced.
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." MORE...
Meanwhile, the government is considering plans for a fresh crackdown on non-doms, which could see the existing levy extended at the Budget in March.
In April 2008, the Labour government introduced a £30,000 annual charge for non-doms who had been living in the UK for seven years or more, writes CITY A.M.
Non-doms are people resident in the UK but not domiciled here, allowing them to avoid paying UK tax on their foreign earnings, although they do pay UK tax on UK earnings.
Treasury sources yesterday confirmed one option under consideration is extending the levy to include non-doms who have been in the UK for less than seven years.
In opposition, chancellor George Osborne proposed a levy of £25,000 on all non-doms regardless of how long they had been UK resident. MORE...
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