Tax cuts ‘virtually impossible’ at present, says Jeremy Hunt
There is no way the UK economy can improve before tax cuts can be delivered, according to Chancellor Jeremy Hunt.
As a result of a better economic outlook and the high cost of living, the Autumn Statement in November called for tax reductions.
On LBC, Mr Hunt said the country’s high debt levels forced him to make difficult decisions.
There hasn’t been a level this high since the early 1960s when the UK’s debt reached 98.8% of GDP.
Despite the fact that the Conservatives are well behind Labour in the opinion polls, there is a debate about what the party can do to gain ground before a general election next May.
Conservative MPs contend that keeping taxes at historically high levels is a mistake, especially given the high cost of living.
Tax cuts should be implemented – or at least a path to them should be outlined.
Following two years of incremental increases, the Bank of England kept interest rates at 5.25% last month after a slight decline in inflation last month, which prevented the cost of borrowing from rising as some had anticipated.
Mr Hunt told Andrew Marr that there is no “extra headroom” for tax cuts because the cost of servicing the country’s debt remains higher than when he delivered the Spring Budget in March.
The situation makes life extremely difficult for him, he said. It makes tax cuts virtually impossible, and I will have to make another set of very difficult decisions.
As far as I am concerned, if we really want to reduce long-term debt costs, then we need to stick to this plan to reduce inflation and interest rates.
It won’t happen before the Autumn Statement on 22 November, alas. I don’t know when that will happen.”
Government insiders have been saying for months that tax cuts aren’t being considered right now.