Electoral boost for Tories as Jeremy Hunt tries to cool hopes of big tax cuts at Budget… as poll shows Labor 19 points ahead

Jeremy Hunt moved to cool hopes of big tax cuts in the Budget today in an electoral blow to the Tories.

The chancellor insisted he is determined to ‘lighten’ the burden ahead of the crucial package in March.

But he risked inciting conservative unrest by warning that they are unlikely to be as significant as the reductions in national insurance from the autumn statement.

Many MPs believe a sweeping move on tax is the only way to restore the party’s fortunes ahead of an election expected towards the end of the year.

And a Savanta poll today underlined the scale of the task facing Rishi Sunak, with Labor 19 points ahead.

A Savanta poll today underlined the scale of the task Rishi Sunak faces, with Labor 19 points ahead

The comments come after the IMF downgraded growth forecasts and took the extraordinary step of warning Mr Hunt not to cut taxes

Speaking to the BBC’s Political Thinking podcast, Hunt publicly repeated a warning he gave to the Cabinet earlier this week.

“It doesn’t look like we’re going to have the same opportunities to cut taxes in the Spring Budget as we had in the Autumn Statement,” Hunt said.

‘And so I have to set people’s expectations about the scale of what I’m doing, because people need to know that when a Conservative government cuts taxes, we’re going to do it in a responsible and sensible way.’

He added: ‘But we also want to be clear that the direction we want to go is to ease the tax burden.’

Hunt said he is still waiting for the ‘final figures’ from the Office for Budget Responsibility (OBR) to tell him how much so-called fiscal leeway he is likely to have to administer tax cuts or spending increases while sticking to his fiscal rules.

He also created a scandal with the watchdog after its chairman appeared to compare public finance forecasts last year to a “work of fiction”.

Richard Hughes said he gave evidence to the Lords Economic Affairs Committee last month: ‘Some people call (the projections) a work of fiction, but that’s being generous when someone has bothered to write a work of fiction and the government hasn’t even bothered to write down what its departmental spending plans underpin the plans for public services.’

Asked about the remarks, Mr Hunt said: ‘Those words are wrong and they should not have been said.

“The government decides on expenditure plans and expenditure reviews.

‘The next spending review starts in April 2025, and until the time the spending review is complete we will of course not publish our spending plans. No government has ever done that.’

But Paul Johnson, director of the Institute for Fiscal Studies (IFS) think tank, said Mr Hunt’s current spending plans meant there could be “some pretty significant cuts” to some public services even before further tax cuts are administered.

He told BBC Radio 4’s Today programme: ‘I think the transparent thing to do would be to say, ‘Here are my tax cuts and this is what it will mean for education spending, social care spending, expenditure on local authorities’.

‘I think it would be very difficult to do that (lower taxes) without having some really significant effects on the quality of public services.’

The comments come after the IMF took the extraordinary step of warning Mr Hunt not to cut taxes.

The international body’s message drew fury from senior Conservatives, who pointed out that its forecasts for the UK have been consistently wrong.

Hunt suggested the IMF’s comments had annoyed him, but said he agreed that “untargeted tax cuts that are just crowd pleasers” are not a good idea.

“But if they are strategic, smart tax cuts, then that is a very important part of the strategy to grow the economy,” he told the BBC.

Taxes as a share of GDP have been heading towards a new high since World War II

Hunt cut National Insurance in November’s Autumn Statement, a move the OBR believes will cost the Exchequer around £9.76 billion in the 2028 tax year.

In a reduction that took effect on January 6 and will be felt in pay packets this month, the main rate of national insurance was sliced ​​by two percentage points, from 12 percent to 10 percent.

The Treasury says the change means a worker on a £35,000 salary will be £450 a year better off, although critics say the benefits are offset by the continued freeze on personal tax thresholds, drawing millions to pay more to the Treasury.