Suella Braverman sets major challenge to Sunak as she outlines demands from Budget

Speaking the day before the Chancellor unveils his Spring Budget, Braverman told the Government to stop "disincentivising people" from working extra hours.

She pointed out that personal taxes are at a "70-year high", warning that middle earners such as teachers and nurses are being "dragged into paying higher levels of tax in a way that was never intended".

In 2021, as Chancellor, Rishi Sunak froze tax thresholds causing people to be pulled into higher tax bands as a result of inflation.

Asked if a 2p cut to national insurance which is expected at tomorrow's budget will be enough, Braverman responded: "I think personal taxes are a good place to start, given that 70-year high and sends a message to the British taxpayer that we're on your side and your work will pay.

"My preference would be 2p off the basic rate of income tax.

"And Rishi Sunak himself promised to take a penny off the basic rate and I would go further with 2p because I think that would really send the message that people will be able to keep more of what they earn.

"I think it also needs to be accompanied with a rising of the personal allowance, the personal allowance and tax income thresholds because we've got the invidious situation now that our tax system actually disincentivizes work.

"It disincentivises people from taking that promotion or working extra hours. And we've got millions of low and middle earners, particularly middle earners, nurses and teachers who are being dragged into paying higher levels of tax in a way that was never intended."

Asked how she would pay for such cuts, Braverman said the Chancellor has £15 billion pounds of fiscal headroom, adding: "We should remember the economic climate is a lot better than it was 12 months ago, inflation has fallen, the economy is growing and debts falling.

"So I think that, you know, many of these tax cuts will be affordable with that fiscal headroom and that leeway that the Chancellor has.

"I think that money should go to paying those tax cuts. I think secondly, we also need to raise revenues in more creative ways. I'm very interested in something I did as Home Secretary in raising taxes and charges on businesses that employ foreign workers."

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Explaining her proposal to tax businesses that employ foreign workers, Braverman said: "As Home Secretary I did succeed in the conversation and secured agreement with the Chancellor on raising visa fees. So we did see about a 10 per cent hike in visa fees.

"But if you look at it, it's a very inelastic demand. Numbers of visas has gone up year on year, they've reached unprecedented levels - 700,000 net migration number last year.

"I think it's only right that we try and attach an economic consequence to that. So if businesses were to cover the costs of people using health services, they were to increase the tax they pay because they were working employing foreign workers. I think we would see an increase in revenue, but also see a fall in net migration."