The Chancellor predicts a change in economic approach next week. Photo: REUTERS/Isabelle Infantes
Taxes need to be cut to help get the economy “sizzling”, Jeremy Hunt said, while warning he must do so responsibly in his autumn statement on Wednesday.
The Chancellor repeated arguments he made in an interview with the Telegraph on Saturday during the round on Sunday broadcast interviews which highlighted the need for tax cuts.
But after a fresh wave of speculation in Sunday newspapers about what taxes he could cut, Mr Hunt also appeared to be trying to test expectations about what would happen.
The Sunday Times reported cuts to income tax and national insurance were being considered by the Treasury ahead of announcements to be made on Wednesday.
This complements cuts to inheritance tax and cuts to business investment tax in the form of an extension of the so-called “scheme” full spending” which was known to be under consideration.
In an interview on Sunday morning, Mr Hunt stressed that tax cuts could not stimulate inflation, which at 4.7% is still above the government's target two percent. “Rome was not built in a day,” he said.
Overall, the Chancellor predicts a change in economic approach next week, with inflation halving this year, although still high, and a renewed focus on growth.
This turnaround coupled with an improving fiscal position after Higher-than-expected tax revenues have given Mr. Hunt more money to play with while achieving his goal of reducing debt.
The Chancellor has floated the idea that he could cut taxes next week, which is remarkable after a year in which both he and Rishi Sunak have repeatedly rejected calls for tax cuts.
Mr Hunt said on air Sky News on Sunday morning: “I want to reduce our tax burden. I think for a productive, dynamic, thriving economy, it's important that you motivate people to do the work and take the risks that we need.”
But there were also warnings about how far he would go. with another chance in next spring's Budget, when inflation is forecast to be lower, to cut taxes ahead of the next general election.
Mr Hunt also told Sky: “We have to show there is a way to lower tax economics.
“If you want to reduce personal taxes, the only way to do it in a sustainable way is to spend public money efficiently.
“Rome wasn’t built in a day, so this it takes time.”
Speaking to Laura Kuenssberg, Mr Hunt stressed that any tax cuts he undertakes must not be inflationary. Photo: Geoff Owers/BBC
He made a similarly cautious remark in his Times Radio interview: “We want lower taxes, we'll do it responsibly.”
“I want to show people that there is a way to reduce taxes. But we also want to be honest with people. This won't happen overnight. It requires enormous discipline year after year.”
And on BBC One's Sunday program with Laura Kuenssberg, Mr Hunt stressed that any tax cuts he undertakes must not be inflationary.
He demanded enormous discipline throughout his speech.
In the interview, Mr Hunt did not confirm the specific measures that would be taken in the Autumn Statement, which are always closely guarded.
Tax cuts traditionally have to be announced to Parliament.
Autumn Statement Mr Hunt will make his announcement shortly before 1pm on Wednesday.