‘The best tax cut we could give people would be to halve inflation’
Jeremy Hunt shares his vision of a country that rewards risk and embraces the opportunities of Brexit
‘We are a country that aspires to greatness. And if we do that, we’ve got to accept that we need to take risks’
Hunt speaks Words of wisdom
If you’re over 50, you’ve actually got time for another entirely new career in your life.
The best tax cut we could give the British people would be to halve inflation. That is a huge, huge increase in people’s disposable income and inflation is an invidious tax rise which we need to get out of the system.
Do I think [work from home] is a good thing for everyone? No, I don’t.
I will absolutely publish my tax return for my time as Chancellor which I think is the right thing to do.
Ahuge portrait of the great Liberal prime minister and four-time chancellor William Gladstone looms over Jeremy Hunt’s study in his office at 11 Downing Street, a gift from past Treasury mandarins.
It faces a much smaller, A3-sized photograph of tax-cutting Conservative chancellor Nigel Lawson, held by many Tories to have nurtured the true flame of Thatcherism, on the wall behind the Chancellor’s desk. For Mr Hunt, the Lawson photograph is the most significant. It was put up by Rishi Sunak when he was chancellor and stands as a testament to the pair’s intention to cut taxes. But not just yet.
“It’s not just me that wants to cut tax. The Prime Minister wants to cut tax as well. But the best tax cut we could give the British people would be to halve inflation.
“That is a huge increase in people’s disposable income. Inflation is an invidious tax rise which we need to get out of the system.”
Mr Hunt suggests that corporation tax – which is to rise to 25 per cent in April, after he reversed Kwasi Kwarteng’s decision to cut it in the then chancellor’s mini Budget last September – will be first on the list when the country can afford it.
“If you’re saying to me, ‘Do I want to get taxes down?’ Yes, I do. If you’re saying, ‘Where would I prioritise?’ My first priority would actually be to bring down business taxes,” he tells me on the Chopper’s Politics podcast.
“We already have the second lowest business taxes as a proportion of GDP in the G7. But we want to have the most competitive tax rates so if people want to start a business, if they want to invest in a European country, they choose here. And having competitive tax rates is very important.”
He says it was “extremely painful” and “a last resort” to reverse Mr Kwarteng’s tax cuts and says now that he is sorry for calling dividend income “unearned wealth” in the Autumn Statement to MPS.
“I wouldn’t use that phrase again. Low taxes are a very important part of getting the incentives right in an economy for innovation, entrepreneurism, and risk-taking.”
Mr Hunt was speaking before a speech at Bloomberg in central London yesterday where he took issue with “declinism” in the UK and urged Britons to take advantage of the opportunities Brexit can offer.
He tells me: “If we are going to succeed in a post-brexit world, it will be because Brexit makes us more hungry as a country.
“The success of Brexit will be because it’s a catalyst that makes us get out into the world and try harder. And having competitive tax rates is a very important part of that.”
He hopes tax will become a clear dividing line with Labour at the next general election. “The difference between Labour and the Conservatives is that we bring taxes down as soon as we can. Labour never does,” he says.
With millions of Britons preparing their own self-assessment tax return ahead of Tuesday’s fast-approaching deadline, Mr Hunt tells me that he will publish his tax return, but only for the period covering his time at the Treasury.
“I will absolutely publish my tax return for my time as Chancellor which I think is the right thing to do,” he says. How about the rest of the Cabinet? “Everyone must make their own decision,” he says. “I am in a different position because I am responsible for the nation’s finances. There is a particular interest in the Chancellor’s tax affairs.”
For Mr Hunt and Mr Sunak, the focus this year is for getting more out of Britain’s working-age population.
Internal Treasury figures show that 8.9 million adults of working age are not in work, that’s 570,000 more than before the pandemic struck in early 2020.
Not all of them can work – the figure includes students, stay at home mothers, carers, the long-term and
‘If we are going to succeed in a post-brexit world, it will be because Brexit makes us more hungry’
short-term stick and early retirees – but Mr Hunt hopes that many of them can. For example, Mr Hunt, 56, wants his fellow over-50s to embrace the “third phase” of their working lives. He says: “If you’re over 50, you’ve actually got time for another entirely new career in your life.
“Even if you don’t want to work full time, work can be an incredibly enriching part of that third phase of your life.
“We want to tap into the abilities, the skills, the experience, the wisdom of people who’ve done a lot of other things in their life.”
On the back benches before he became Chancellor last October, Mr Hunt would raise an eyebrow when Jacob Rees-mogg, the business secretary at the time, urged civil servants back to work. Not any more.
“Jacob Rees-mogg had an important insight when he said that this is not a permanent change that we want to see in the economy.
“I don’t know if we need new rules, but I would like to encourage people to come into the office and meet the Chancellor face to face.”
It is a balance, he concedes, and while some can work from home, plenty of others are held back by not sharing in “watercooler moments” with work colleagues.
He says: “There are specific areas where ‘working from home’ can increase productivity – for example, parents who have childcare responsibilities or for disabled people.
“But do I think it’s a good thing for everyone? No, I don’t. And the reason I don’t is because whilst you may be able to tick the boxes for all the precise jobs that you’re paid to do, if you do them from home, do you get the creativity, the buzz, the teamwork, the personal growth that you would get if you were in an office with a team of people around you, everyone focused on trying to achieve the same task?
“You don’t. That’s why we need to get back to people in the office, working as teams, getting all the benefits from being with lots of other people, bouncing ideas off each other, all those watercooler moments. That is a part of life and we need to make sure we get it back.”
Mr Hunt is an entrepreneur – he made a reported £14.5million from the sale of his Hot Courses business in 2014 – and he wants the UK to embrace risk-taking.
It is wrong, he says, to describe the attempt to put satellites into space from Cornwall this month as a failure. Instead it should be seen as a “stepping stone” to more launches.
“Too often we brand these kinds of things as failures. I had a whole succession of failures before I had a business that took off.
“We are a country that aspires to greatness and wants to make a splash in the world. And if we do that, we’ve got to accept that we’re going to need to take risks.”
Mr Hunt’s support for risk-taking entrepreneurs extends to Nadhim Zahawi, the embattled party chairman whose reported £5million tax settlement with HMRC is under investigation in Whitehall.
“I don’t want to talk about the individual case,” he says when I ask about Mr Zahawi. “But let me say this. I do want more entrepreneurs in politics.
“It’s a tremendous positive to have people around the Cabinet table who know what it’s like to take risks.”
Mr Hunt has been Chancellor for just over 100 days. “I wasn’t expecting to be doing this job. I thought I was all beached up. And then I got the text from Liz Truss [then prime minister] that I thought was a hoax,” he says.
“I couldn’t say no to this job because becoming an entrepreneur was the best decision I ever made.”
As Chancellor, Mr Hunt holds the pen on any new pay deals to head off more strike action by public sector unions. But he warns that he cannot sanction pay rises which will risk the target of halving inflation by Christmas.
He says: “We want to resolve these issues. We recognise people in public services work extremely hard, but we can’t agree to anything that’s going to entrench high inflation.” Mr Hunt, a former health secretary who tells me he does not pay for private health care, wants to see the NHS reformed, but does not want to go as far as his former colleague Sajid Javid and charge for GP appointments.
He wonders if the NHS can ditch the “targets culture” to give more power to local health chiefs, similar to the freedoms given to headteachers in the schools system.
“We’ve risen nine places in the international league tables for English and maths, and we’ve done it by decentralising power, by allowing heads to manage. I don’t think we allow hospital managers to do that.”
This feels like Mr Hunt’s last job in government. He says he no longer wants to lead the Tory party. (“That is not going to happen. And I don’t want it to happen,” he says). And his favourite takeaway is from the upmarket Gourmet Burger Kitchen.
While this year is all about getting the economy back on track, Mr Hunt allows himself a chance to dream. He says he backs The Daily Telegraph’s long-running campaign for a replacement for Royal Yacht Britannia – which nearly got off the drawing board when Boris Johnson was prime minister.
“I want us to be proud as a country. Right now, when you look at the existential battle for freedom that is going on in Ukraine, our priority has to be supporting brave Ukrainians. “Is it something that I would like us to see in my lifetime? Absolutely.”