His comments indicate appetite around the Cabinet table to lower the tax burden when economic conditions and the Treasury’s finances allow.
On Thursday, the Bank of England raised interest rates from 4.25 per cent to 4.5 per cent, amounting to the 12th straight increase in a row.
It means borrowing costs are now at their highest level since 2008, with the Bank warning it will take another two years to get inflation under control.
Andrew Bailey, the governor of the Bank of England, was forced to scrap its previous gloomy prediction of a year-long recession as he presided over the biggest upgrade to its growth forecasts on record.
He admitted: “The economy has turned out to be more resilient than we expected it to be.”
Rishi Sunak, the Prime Minister, and Jeremy Hunt, the Chancellor, have both insisted they are at heart low-tax Tories. However, they have argued that they must control inflation first before taking such moves.
Conservative MPs have made fresh calls for bolder measures to revert the long-term hit to the working population. Allies of Boris Johnson and Liz Truss are expected to push for tax cuts in the Autumn Statement later this year.
Mr Sunak made persuading people to return to work a priority when he entered Number 10 in October, commissioning Mr Stride’s department to help devise policies targeting early retirees.
At the heart of Mr Hunt’s first Budget earlier in the year was a package of measures designed to achieve that aim, including moves to encourage over-50s to stay in work for longer.
These included scrapping a cap on the amount that can be saved in a pension pot without paying tax.
Other back-to-work policies included expanded childcare provision – in the hope of allowing more parents to take up jobs – and a £925 million Universal Support programme aimed at helping 50,000 people with disabilities and long-term sickness into employment every year.
Tory MPs applauded Mr Stride’s comments but insisted that bolder policies were now needed if the ambition is achieved.
Don’t ‘leave it too late’ on tax cuts
Nigel Mills, a Tory backbencher who sits on the House of Commons work and pensions committee, said: “The economic inactivity plan was sort of presented at the Budget, but there wasn’t a great deal in it. It’s not immediately clear to me that there’s clearly a very great plan for that.
“My big worry would be that the people choosing not to go back to work may regret this in a few years’ time, when it’s too late. But how you get people to understand that is quite hard.
“It’s the right idea, the right ambition, but there needs to be some way of doing it.”
Sir John Redwood, a former Cabinet minister, urged the Government not to “leave it too late” on tax cuts.
He said: “Any tax cut is better than no tax cut, but a delayed tax cut of the wrong sort is not as good as the right cut.
“There’s no time for messing around. These people don’t understand it, they are doing huge damage if they don’t get that we need to promote investment, expand capacity and make it better to do business in Britain now – it is urgent.”
Meanwhile, Mr Stride suggested the state pension age would not rise to 68 until 2037 at the earliest after ministers shelved a planned increase earlier this year.
While the state pension age is scheduled to rise from 66 to 67 between 2026 and 2028, Mr Stride said there was “no reason” to decide now on a further uplift.
