Jeremy Hunt has signalled he will cut more taxes and prioritise economic growth as inflation is falling “faster than expected”.
The Chancellor, speaking in Davos, Switzerland, said lower taxes were the “direction of travel” as he prepares to deliver the Budget in March.
Mr Hunt admitted voters were “very angry” about the record high tax burden, hinting at possible cuts to personal taxes
But he revealed: “I believe fundamentally that low-tax economies are more dynamic and more competitive, and in the end, generate more wealth for public services like the NHS.
“We look around the world and we notice that the economies that are growing faster than us — North America, Asian economies — tend to have lower taxes . . . So that’s the direction of travel we’d like to go in, but it’s too early to know the extent to which we’ll be able to do it.”
Speaking at the World Economic Forum, Mr Hunt said he will focus on “pro-growth policies” to turbocharge the British economy.
He said: “I can assure you that we will prioritise economic growth.”
During the Autumn Statement, Mr Hunt warned rising prices would limit the scope for tax cuts.
But he said he was “confident” that inflation will continue to fall and that prices were “heading in the right direction”.
He told reporters on Thursday: “I think it’s coming down. I think it will continue to fall.”
While Mr Hunt insisted that it was “too early to know the extent to which we’ll be able to [cut taxes]”, he said the rapid fall in inflation was a sign that Britain’s economic prospects are improving.
He said: “We are making faster than expected progress and bringing inflation down and I’m confident we’re heading in the right direction.”
But the Chancellor said tax cuts would not be funded by “significantly increasing borrowing”.
Asked whether it would be responsible to cut taxes when debt is increasing, Mr Hunt said: “If you fund them by significantly increasing borrowing, then you are just sending the bill to future generations.
“But if it’s because of the inherent growth of the economy and you can still see debt falling over the five-year period, then it can be very pro-growth.”
