- Becky Morton & Laura Kuensberg
- bbc politics
Mr. Hunt: We will only reduce taxes in a responsible way.
Jeremy Hunt hinted at introducing tax cuts when he tabled his Budget on Wednesday.
The Prime Minister is under increasing pressure from Conservative MPs to cut taxes, which are now at historic highs.
In an interview with the BBC, he said he wanted to “set out a path” to a low-tax economy, but insisted he would only do so in a “responsible” way.
Labor said that no matter what he did, people would be worse off “thanks to 14 years of Tory failures”.
Among the measures Mr Hunt is believed to be considering is further cuts to National Insurance, which was already cut from 12% to 10% in last autumn's statement.
Mr Hunt said in an interview on the BBC's 'Sunday with Laura Kuenssberg' that the Budget, in which the government sets out its tax and spending plans, will be about “long-term growth”.
“If you look around the world, the fastest growing economies, whether it's North America or Asia, tend to be countries with low tax rates,” he said.
Mr Hunt suggested the government had always said it would only cut taxes in a “responsible and prudent” way.
He added: “The least conservative thing I could do would be to borrow more and cut taxes.
“But we want to move to a lower tax economy where we can do so responsibly, and we want to chart a path in that direction.”
Despite last year's national insurance cuts, and despite a general election scheduled to be held by the end of January, the total amount of taxes paid by citizens is on track to reach record levels.
Earlier this year, the Government's independent economic forecaster, the Office for Budget Responsibility (OBR), estimated that the Chancellor would have around £30bn of “headroom” in his budget proposals.
This estimate was made in response to a sharp decline in borrowing costs, which should have provided further room for tax cuts.
But borrowing costs have since started to rise again, and by the middle of last month the figure was back to November's level of around £13bn, the BBC understands.
It is not a comfortable position for Conservative supporters seeking historically large tax cuts while government spending rules and the OBR are unilaterally strangling them.
But there is widespread hope in Westminster that the Chancellor will make some tax cuts, even if they are not major moves.
Darren Jones, Labour's shadow chief secretary at the Treasury, said: “The Chancellor says he wants to cut taxes, but it's the Conservatives who have increased taxes to the highest level in 70 years.”
“No matter what the Chancellor does in his Budget this week, workers will be worse off thanks to 14 years of Tory failures.”
Paul Johnson, director of the Institute for Fiscal Studies (IFS) think tank, told the BBC that the tax cuts in the Budget are “likely to be reversed after the next election, no matter who wins”.
The IFS also warns that further tax cuts are likely to mean spending cuts in the future.
Asked whether the government should spend more on public services rather than cutting taxes, Mr Hunt said: “I think what most people want is better public services and lower tax burdens.''
“The only way to deliver something like that is to spend the money we spend on public services more efficiently.”
“hinder” economic growth
Former Bank of England chief economist Andy Haldane said on the show that government-imposed spending limits, known as “fiscal rules”, were “hampering” economic growth and constraining the chancellor's decisions. I spoke my mind.
These include incurring debt in proportion to the proportion of the size of the economy that declines over five years.
Mr Hunt said he did not agree that the government should change fiscal rules because “people would interpret this to mean the UK has lost control of its finances”.
The recent memory of financial market meltdown after Liz Truss’s 2022 mini-Budget (which included £45bn of unfunded tax cuts) is a reminder of why such rules exist .
But there also appears to be growing concern that the system that is supposed to ensure stability could have negative effects.
non dom
Non-residents are UK residents whose tax domicile is overseas. Under the current system, you don't have to pay UK tax on money earned overseas.
Mr Hunt has previously defended the tax system, arguing that it helps make Britain an attractive place for wealthy people to live and work.
Labor has promised to abolish non-dam status and spend the money generated on schools and the NHS.
If the party backs the tax cuts announced by the Prime Minister, which is expected, questions will remain about how some of the spending pledges will be funded.
Mr. Hunt declined to comment on potential changes to specific taxes.
But he told the BBC: “The country has seen through the trick and there will be no trick on Wednesday.”
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