Hunt casts doubt on big Budget tax cuts despite pressure from panicking Tory MPs

01 February 2024 , 15:33

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The Chancellor Jeremy Hunt will deliver the Budget on March 6 (Image: Ian Vogler / Daily Mirror)

Jeremy Hunt has cast doubt on big tax cuts at the spring Budget - despite pressure for panicking Tory MPs.

The Chancellor said it does not appear the Treasury will have the "same scope" for cutting taxes as at the Autumn Statement last year.

In November the government cut the main rate of national insurance but Tory MPs fearful of an election wipeout desperately want Mr Hunt to go further. Last year the Institute for Fiscal Studies (IfS) think-tank warned the tax burden was on course to hit the highest level since the Second World War.

Mr Hunt told the BBC's Political Thinking podcast: "It doesn't look to me like we will have the same scope for cutting taxes in the spring Budget that we had in the Autumn Statement."

He added: "And so I need to set people's expectations about the scale of what I'm doing because people need to know that when a Conservative government cuts taxes we will do so in a responsible and sensible way. But we also want to be clear that the direction of travel we want to go in is to lighten the tax burden."

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Just days ago the International Monetary Fund (IMF) also urged Mr Hunt not to cut taxes in a bombshell intervention just weeks before the Budget. The body suggested cuts could mean less money for vital public services such as the NHS.

But the senior Tory MP Sir David Davis hit back, saying the IMF should "go get lost". "We should stop listening to financial forecasts that are based on the prejudices of the people who write them," he said. The ex-Brexit secretary also predicted "there'll be tax cuts, the question is the size".

Paul Johnson, director of the Institute for Fiscal Studies (IFS) think tank, said Mr Hunt's current spending plans mean there could be "some pretty significant cuts" for some public services even before further tax cuts are administered.

He told BBC Radio 4's Today programme: "I think the transparent thing to do would be to say, 'Here are my tax cuts, and this is what this would mean for education spending, social care spending, local government spending'. I think it would be very difficult to do it (cut taxes) without having some really significant effects on the quality of public services."

Ashley Cowburn