Hunt plots tax giveaway after inflation eases

JEREMY HUNT has signalled he will deliver a tax-cutting Budget in March as the Chancellor hailed the end of an era of high inflation.

In the clearest signal yet that he is preparing a series of pre-election giveaways, Mr Hunt said lower taxes were the “direction of travel” as he prepares to fight a campaign against a Labour Party hinting at tax cuts for workers.

The Chancellor said: “I believe fundamentally that low-tax economies are more dynamic and more competitive, and in the end, generate more wealth for public services like the NHS.” Mr Hunt also hinted at possible personal tax cuts that would provide a boost to business as he admitted that voters were “very angry” about high levies.

Speaking at the World Economic Forum in Davos, Switzerland, Mr Hunt said he would focus on “pro-growth policies” in his forthcoming Budget to make Britain more competitive.

It came as Google announced plans to spend $1 billion (£790 million) building a data centre in Hertfordshire – its biggest single investment in Britain.

The Chancellor’s comments mark a departure from the Autumn Statement, when he warned that rising prices would limit the scope for tax cuts. Inflation now stands at 4 per cent, which is almost a percentage point lower than the Government’s official tax and spending watchdog had predicted. The Chancellor said he was “confident” that inflation would continue to fall and that prices were “heading in the right direction”.

Lower inflation would help to pave the way for faster interest rate cuts by the Bank of England, as well as reducing the Government’s debt interest bill. Lower debt interest payments alone could add almost £15billion to the Chancellor’s tax-cutting war chest, calculations suggest.

Mr Hunt also said yesterday he was looking to make the public sector more efficient. He said: “If AI can transform the way our public services are delivered and lead to more productive public services with lower tax levels, that is a very big win.”