Mr Hunt stresses he will only cut taxes in “responsible” cases; way Photo: Mandel Ngan/AFP
Jeremy Hunt vowed to go “further and faster” to cut welfare spending, warning of unsustainable increases in the cost of unemployment benefits.
In an interview with The Telegraph, the Chancellor also said he wanted to cut National Insurance by a further 2p before the election, but stressed he would only cut taxes in a “responsible” way.
Hunt said getting more people back to work and cutting the benefits bill would be a key part of the Conservative manifesto as he seeks to draw a dividing line between the Tories and Labor on welfare issues.
He added that too many people “labeled” with mental health problems and “kept[ed] on benefits outside of work” indefinitely.
He said over-labeling was becoming a growing problem in government, adding that the Work and Pensions Secretary Mel Stride leads the campaign to 'change the equation' in welfare.
He suggested the government was looking to develop its “carrot and stick” policies, including tougher sanctions for people who refuse to look for work, as well as more support to stop people with mental health problems leaving work.
“If we keep you on benefits outside of work, it will only make things worse,” Mr Hunt said. “This is a great idea that Mel Stride has discovered and we absolutely support him to push further and faster on these reforms.”
Mr Hunt added: “Continue to increase our social care spending It's not sustainable at the rate we're doing it.”
The Chancellor also hinted that the Tories are preparing new public sector reforms as part of a push to boost productivity in the sector.
Asked what he was doing to tackle unemployment and pay, Mr Hunt said: “Let me just say this: I think you'll see further plans to tackle this in our manifesto. This is something we work hard on inside government because we believe we can reduce the tax burden on working families.
“But the two pillars on which this depends are welfare reform and labor productivity. in the field of public services, and in both of these areas we have said a lot and will say even more.”
A record 2.8 million people are now economically inactive because they are too ill to work. This number has risen sharply since lockdown and is now the longest sustained increase on record.
In total, 9.4 million people aged 16 to 64 are economically inactive, according to the Office for National Statistics – do not work and do not look for work, and the most common reason for inactivity is long-term illness.
Mr Hunt said he agreed with Mr Stride that over-labeling of mental illness was a big problem in the UK.
He said: “Labeling is a particular problem if it leads to benefits package that means people feel they can't work because they worry that if they participate in the world of work, they might lose the benefits they depend on.
“We have to change that equation because if you have mild anxiety and then you leave the world of work, it's much more likely to become a serious problem than if you stayed at work.
Asked whether cutting National Insurance by a further 2p was a priority in the next fiscal, he said: “We want to cut staff National Insurance and eventually abolish it. So yes, we would definitely like to do it, but we will do it responsibly.”
Mr Hunt's comments put him on a potential collision course with the International Monetary Fund (IMF), which has warned that pre-election tax cuts would lead to rising British debt. until the end of the decade.
Another national insurance cut, which would save the average worker £900 a year, would cost around £9 billion a year.
The IMF said. It was “critically important” that the UK does more to cut borrowing as it warned that “significant” cuts to national insurance would “worse the debt trajectory”.
The Institute for Fiscal Studies (IFS) also warned that the next government will be forced to raise taxes if government spending is not brought under control.
Martin Miklos, an economist at the IFS, said: “The tax increases, although large on a historical and international scale, do not match the increase in spending.”< /p>
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