Spring Budget 2024: Hunt won’t borrow to fund tax cuts in ‘prudent’ package
Jeremy Hunt has insisted he won’t borrow to fund tax cuts in what he said would be a “prudent and responsible” Spring Budget this week.
The Chancellor told broadcasters today that he hoped to use Wednesday’s fiscal event to show voters a “path” heading in the direction of tax cuts, but warned any specific reductions would have to be “sustainable” and “affordable”.
It follows the Treasury announcing plans to slash wasteful Whitehall spending in a bid to boost public sector productivity, which Hunt suggested could save up to £1.8bn by 2029.
The Sunday Times reported that Hunt could also announce a 2p cut to personal taxation, which would be funded by a £300m tax grab on second home owners.
Speaking to the BBC’s Sunday with Laura Kuenssberg, Hunt ruled out borrowing to fund tax cuts, setting a red line for the Conservative government as he said: “I won’t do that.”
He added: “I do want, where it is possible to do so responsibly, to move towards a lower tax economy, and I hope to show a path in that direction.
“This will be a prudent and responsible budget for long-term growth, tackling inflation, more investment, more jobs and that path to lower taxation as and when we can afford that.”
Hunt denied there would be any “gimmicks”, adding: “The country sees through gimmicks and we are not going to do gimmicks on Wednesday.”
He also insisted to Sky News’ Trevor Phillips that all Conservatives “believe the state has a moral duty to leave as much money in people’s pockets as possible”.
He added: “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.
“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… in a responsible way.”
Trimming the civil service fat and cutting taxes has been the wider Treasury message in recent weeks.
But fiscal headroom forecasts have narrowed, after the Office for Budget Responsibility (OBR) sliced its predictions from January’s £30bn to around £13bn ahead of the Spring Budget this week, forcing the Treasury to float tax-raising policies, like a vape levy, to fund any pre-election giveaways.
Headroom measures the spare money Hunt has to spend, while still being expected to meet his fiscal rule of getting debt falling between the fourth and fifth year of the OBR’s forecast.
Darren Jones, Labour’s shadow chief Treasury secretary, said: “The Chancellor says he wants to cut taxes, but it’s the Tories who have raised taxes to their highest level in 70 years.
“No matter what the Chancellor does in the budget this week, working people will be worse off thanks to 14 years of Tory failure.
“Only Labour has a plan to bring security back to family finances and make working people better off.”