Jeremy Hunt is considering cutting an extra penny off National Insurance in a Spring Budget giveaway. Speaking to the Daily Express, the Chancellor vowed he would prioritise tax cuts that boost growth.
On the day Labour paraded its credentials with big business, the Chancellor warned the opposition’s spending spree plans would lead to a “tax bombshell” for hardworking families.
Mr Hunt dismissed economic “pessimists” who talk down the country and insisted there is “nowhere better to be”.
Laying out his priorities ahead of the March budget, he hinted national insurance could be cut further.
Mr Hunt told the Daily Express: “Chancellors don’t talk about what they might be considering ahead of budgets.
“But what I will say is this though, my priority would be taxes that boost growth.
“So, the NI cut we announced in the autumn statement is going to put the equivalent of nearly 100,000 people in work. That’s going to fill about one in ten vacancies across the economy.
“It’s not just putting money in people’s pockets, it’s helping businesses to grow because it means they can recruit the staff they need.
“That is the difference between Conservative and Labour. We think that lowering taxes boosts economic growth whereas Labour think the way to grow more is to spend more. That’s the profound difference between the two parties.”
The Daily Express understands the Chancellor is considering cutting another penny off national insurance. It would cost £5 billion, two billion less than cutting the same amount off income tax.
Mr Hunt, who took delivery of his first set of economic budget forecasts from the Office for Budget Responsibility this week, has around £14 billion to play with according to the latest assessment.
Another NI cut would build on the 2p cut to the rate he introduced in the autumn statement.
But cutting income tax to give a boost to hard-pressed workers instead still remains an option. The Chancellor warned he does not expect to have as much room for manoeuvre as he did last November.
He said: “No one wants a tax cut that is not a real, permanent sustainable tax cut. So I would only cut taxes when it is responsible to do so.
“At the moment, looking at the numbers, it doesn’t look like I will have the same scope to bring down taxes as I did at the autumn statement. But I would like to do so as far as it is responsible to do so.”
Mr Hunt took a swipe at the International Monetary Fund after it “advised the UK against further tax cuts” earlier this week.
The Chancellor said he “profoundly” disagreed with any interference to stop tax cuts that would boost growth. And he dismissed the naysayer economists who consistently downplay Britain’s economic health and end up being proved wrong.
He said: “We were told we were going to have the longest recession in 100 years and the economy has grown. We were told living standards were going to fall … they actually rose.
“I think people are already seeing that taking difficult decisions has paid off. But when it comes to the longer term I think there is far too much negativity and defeatism about our prospects.”
Speaking during a visit to Sesame Access For All in Surrey, which makes invisible lifts, including one installed in No 10 Downing Street, Mr Hunt insisted there is “no shortcut to prosperity”. “
The fact that today the Bank of England has upgraded its growth forecasts for the country not just for this year but next year and the year after shows that people who have been pessimistic about the UK and our prospects have been proved wrong,” he added.
Mr Hunt insisted he will take “sensible” decisions that a right for the long term.
“For people who read the Express, who are thinking about their children and their grandchildren, there is nowhere better to be,” he said.
“But we have always been successful as a country when we have faced up to the need to build for the future, to take long term decisions, and to recognise that you can’t have all your jam today. That’s why we will always take wise and sensible decisions.”
Mr Hunt warned Labour would go “mad on spending” with its £28 billion plan for green investment.
He said it would cost families about £2,000 if it was introduced in one go and warned it was a problem that Sir Keir Starmer will not say when the money will be spent.
“That really matters because in the end if your priority is to spend that kind of extra money it can only mean taxes going up just at the point we are starting to bring them down,” he said. “That would take us back to square one. It would be a tax bombshell for the 21st century.”
Mr Hunt is one of the most high profile Tories facing a struggle to keep hold of his South West Surrey seat at the general election.
He insisted he is fighting every day to hold on to it. “I believe I can keep it. The team are working very very hard. I don’t take a single vote for granted,” he added.
The Chancellor had a message for the Tory plotters attempting to destabilise Prime Minister Rishi Sunak.
“United parties win, divided parties fail,” he said. “Conservatives united never can be defeated.”
