Jeremy Hunt hints at tax cuts ahead in March Budget, as he admits voters are 'angry'

18 January 2024, 21:58

Jeremy Hunt has hinted that the Budget in March could contain tax cuts, as he said that he would "prioritise economic growth".

The Chancellor said that he wanted the UK's "direction of travel" to follow countries whose economies are growing faster than the UK, which tend to have lower taxes.

Mr Hunt told an audience at the World Economic Forum in Davos on Thursday that countries with lower taxes were "more dynamic" and deliver more money for public services.

The Spring budget is set to take place on March 6, with a general election almost certainly taking place later this year.

Cutting taxes could deliver the Conservatives a boost as they seek to fend off Sir Keir Starmer's resurgent Labour party, who are significantly ahead in the polls.

Read more: Jeremy Hunt will only cut more taxes if 'affordable and responsible' despite Tory hopes of pre-election boost

Read more: 'Put aside defeatism': Chancellor tells LBC he wants lower income tax

Mr Hunt admitted that some voters were "very angry" about the level of taxation - the highest as a percentage of GDP since records began.

This is largely due to tax brackets being frozen despite rising wages and inflation, which pushes more people into higher tax bands than before.

Mr Hunt told the Davos audience: "In terms of the direction of travel we look around the world and we note that the economies growing faster than us in North America and Asia tend to have lower taxes, and I believe fundamentally that low-tax economies are more dynamic, more competitive and generate more money for public services like the NHS.

"That's the direction of travel we would like to go in but it is too early to say what we are going to do."

Last week, the Chancellor told LBC's Paul Brand that he would only make further cuts in March if it was "affordable and responsible".

He said that"we can't get back to pre-Covid levels of tax in one go" but that his two percentage point cut to National Insurance should make a "big difference to family budgets when people have been feeling a lot of pressure".

Chancellor Jeremy Hunt on taxes

Mr Hunt added: "I can assure you that we will prioritise economic growth." He added that he was confident that inflation would continue to fall.

"We are making faster than expected progress and bringing inflation down and I’m confident we’re heading in the right direction," he said.

Labour's Shadow Chancellor Rachel Reeves also hinted that she would look to cut taxes. "My instinct is to have lower taxes," she told the Telegraph on Wednesday.

Rishi Sunak said earlier this year that his "working assumption" was that the election would take place at some point in the autumn, but was not more specific.

Mr Hunt said he did not know when the general election would be yet.

The Chancellor said: "The Prime Minister hasn't decided on the date of the election yet, or if he has he hasn't told me.

"By law there have to be two fiscal events each year. We will see where we get to after the spring Budget."