Hunt fuels speculation of tax cuts in Spring Budget
JEREMY HUNT has dropped the strongest hint yet that he is planning to unveil a major package of tax cuts at the Spring Budget.
The Chancellor said that Treasury officials have provided him with “clear” proof that countries with lower tax burdens enjoy higher economic growth.
He implied there may be further cuts in a pre-election Autumn Statement, saying he plans to put the UK on a longterm “path to lower taxes”. There is speculation he could cut 2p off income tax in March – doubling the pledge Rishi Sunak made last year to cut it by 1p.
Mr Hunt could also unveil another cut to National Insurance, building on the 2 per cent reduction he announced last year. It is thought he will have more room for manoeuvre at the Spring Budget because Government borrowing has come in lower than forecast.
The spending watchdog, the Office for Budget Responsibility, is expected to hand him figures next week showing he has around £20billion of headroom.
Cutting 2p off income tax would cost just under £14 billion a year, while another 2p to National Insurance could cost around £9 billion.
Mr Sunak announced that Mr Hunt will be staying on as Chancellor until the next election. On the Conservative Home website, Mr Hunt wrote: “I recently asked my Treasury officials to do a detailed analysis of the correlation between taxes and growth, and the answer came back clearly – something we Conservatives have always known.
“Across the G7, across the G20, across the last 25 years: lower taxed economies have seen higher growth, and higher taxed economies have seen lower growth. It’s why we’ve brought taxes down, wherever and whenever we responsibly could. You can see it in our track record after our repair job on the public finances from 2010, and you’ll see it as we emerge from the turbulence of recent years.
“Not just because it’s right, but because it’s the only path to a sustainably higher growth economy.”
He said that Sir Keir Starmer’s insistence he will spend £28billion a year on green projects while keeping taxes down was “dishonesty in the extreme”.