April 16, 2024

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Jeremy Hunt warns of ‘long path’ ahead to cut UK tax burden

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Chancellor Jeremy Hunt has warned ahead of Wednesday’s Budget that there is “a long path” ahead to cut Britain’s tax burden, as he admitted that recent official fiscal forecasts had made his task harder.

Hunt, who has tried to scrape together enough money to fund significant personal tax cuts on March 6, said on Sunday: “We’ve always said we would only cut taxes in a way that’s responsible and prudent.”

The chancellor has been talking down expectations of big tax cuts in recent weeks, but Tory MPs still hope that he will surprise on the upside, possibly matching the 2p cut in national insurance rates he announced in his Autumn Statement.

Hunt’s allies have indicated the chancellor would like to cut national insurance or income tax rates by 2p in the Budget, but have warned that the tight fiscal situation rendered that extremely difficult.

Each 1p cut in employee national insurance rates costs £5bn, while a 1p cut in the 20p basic income tax rate costs £7bn. An NI cut is seen as a more pro-growth measure as it would only benefit workers.

“We’ve always said we would only cut taxes in a way that’s responsible and prudent,” Hunt told the BBC’s Laura Kuenssberg. “The most un-Conservative thing I could do would be to cut taxes by increasing borrowing.”

Hunt said he would do “the right thing in the long-term interests of the country”, including investing hundreds of millions of pounds to boost productivity in areas such as the NHS and the police.

To raise funds for headline-grabbing tax cuts, Hunt has looked at stealing Labour’s policy of scaling back or axing the “non dom” tax regime, raising between £2bn and £3bn a year. He declined to rule out such a move on Sunday.

Extending the windfall tax on oil and gas companies, another Labour policy, would raise more than £10bn over five years, according to the opposition…

2024-03-03 06:07:14

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