Jeremy Hunt’s repeat of the 2p ploy promises political gains and losses

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Jeremy Hunt will present his final pre-election budget later today: I’ll have more on what he does in a special, post-budget newsletter. The FT’s excellent newsletter on the global economy, written by longtime FT newshound Darren Dodd, will have a wrap of all our Budget coverage and comment later this evening (sign up here).

For now, some thoughts about the political aims that Hunt has in his Budget.

The right that says ‘NI’

At the Autumn Statement last year, Jeremy Hunt used most of his “headroom” to introduce a series of genuine “pro-growth” measures: making “full expensing” permanent (a big tax break for companies), increasing the government’s spending on computing power to develop artificial intelligence and further fleshing out its £2.5bn national quantum strategy. He also used £9bn of it to cut national insurance by 2p in a bid to turn around the Conservative party’s flagging electoral fortunes, and because, quite frankly, the internal pressure within the Tory party to do it had become irresistible.

So how successful was the 2p tax cut? In terms of the Conservative-Labour battle, not at all. Since the last fiscal statement, the polls have if anything worsened for the Conservative party. On Monday, polling by Ipsos put Tory support at 20 per cent, the lowest level since its survey began in 1978. The Conservatives have lost three by-elections on the bounce. But in terms of the internal battle within the Tory party, the national insurance cut has done its job, in that Rishi Sunak is still prime…