Budget 2024: Unfunded tax cuts ‘deeply unconservative’, says Jeremy Hunt
The chancellor has played down expectations of tax cuts in Wednesday’s budget, telling Sky News his spending plans will be “prudent and responsible”.
Speaking to Sunday Morning With Trevor Phillips, the cabinet minister it would be “deeply unconservative” to take decisions that were unfunded and increased borrowing.
Jeremy Hunt is under pressure to deliver tax cuts in what could be the last economic set piece from the Conservatives before the next general election, which is widely expected in the autumn.
Politics live: Chancellor tempers tax cut expectations as he says budget ‘will be affordable’
The tax burden is reaching record levels, with it expected to rise to its highest point since the Second World War before the end of this decade as the country looks to pay back heavy borrowing used to support people through the COVID-19 pandemic and the energy price spike in the aftermath of Russia’s invasion of Ukraine.
Mr Hunt said: “It’s going to be a prudent and responsible budget for long-term growth.
“And when it comes to tax cuts, I do believe that if you look around the world, countries with lower tax tend to grow faster like North America, Asia.
“And so I do think in the long run, we want to move back to being a lower taxed, more lightly regulated economy.
“But it would be deeply unconservative to cut taxes in a way that increased borrowing…
“If I think of the great tax cutting budgets of the past – Nigel Lawson’s budget in 1988 – the reason that was so significant is because those cuts were permanent and people need to know that these are tax cuts you can really afford.
“So it will be responsible and everything I do will be affordable.”
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Mr Hunt described the 2p cut to national insurance at the autumn statement as a “turning point”.
He said: “All conservatives believe that the state has a moral duty to leave as much money in people’s pockets as possible because it belongs to the people who earn that money.
“But we all know that it is not conservative to cut taxes, for example, by increasing borrowing because then you are just passing on the bill to future generations.
“So what you saw in the autumn statement was a turning point, when we cut 2p off the national insurance rate.
“We will hope to make some progress on that journey but we are going to do so in a responsible way.”
Mr Hunt is also thought to be considering abolishing the non-dom status as a potential way of raising revenue, despite resisting the idea in the past.
It means an individual only has to pay tax on money earned in the UK, but not on foreign income.
The prime minister’s wife Akshata Murty previously benefitted from the status, but following criticism said she would pay UK tax on her overseas income.
Labour’s shadow education secretary Bridget Phillipson said it would be an “abject humiliation” for the Tories if they implemented Labour’s nom-dom policy given cabinet ministers had “spent years rubbishing this idea”.
She told Phillips: “If they were to do it it would just demonstrate that it is Labour who are leading the charge when it comes to the battle of ideas in this country.”
Over the weekend, Mr Hunt announced an £800m package of technology reforms designed to free up time for frontline public service workers.
Under the move, police will use drones to assess incidents such as traffic collisions and artificial intelligence will be deployed to cut MRI scan times by a third.
The Treasury said the changes have the potential to deliver £1.8bn worth of benefits to public sector productivity by 2029.