Chancellor Jeremy Hunt said he will take the “path” to reducing the tax burden while remaining tight-lipped on whether any cuts will be included on Wednesday in the autumn budget.
Mr. Hunt declined to comment on media reports that he’s mulling a slash of inheritance tax but said he is “personally uncomfortable” with the tax burden, which is at 35.45 percent, the highest level in over 70 years.
Tax burden, measured by the amount of taxes raised as a percentage of GDP, can be lowered by cutting taxes, growing the GDP, or both.
Data published by the Office for National Statistics (ONS) on Wednesday show the UK’s annual inflation was 4.6 percent in October, down from 11.1 percent in October 2022, meaning Prime Minister Rishi Sunak was able to put a checkmark on his promise to halve inflation by the end of the year.
Writing on X, formerly known as Twitter, on Saturday, the chancellor said the figure means “we are winning the battle against inflation and can move to the next part of our economic plan in the Autumn Statement.”
Mr. Hunt said the public can expect “more growth, more jobs, more opportunity” from the upcoming budget.
But the chancellor remains cautious about moving too fast, telling The Telegraph on Friday, “We cannot be complacent.
“Inflation is still above target and so we obviously need to stick to the plan,” he said, before declaring “this is now a moment when we can start to plan for a post-inflation economy where we’re focusing on long-term growth.”
Pressed on whether there will be any cuts on Wednesday, the chancellor didn’t give a direct answer.
“I fundamentally reject the Labour consensus that taxes have to ratchet ever higher. And I think it’s incredibly dangerous for us as a country if we get into this easy way of thinking that there’s only one way taxes can go,” he said.
However, he added, he would not do “tax cuts that are inflationary” or borrow to fund tax cuts.
“Within that context, I suppose the big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path,” he said.
“It’s not an easy path. There are difficult decisions you have to take to get there. But we believe if we’re going to grow the economy, this is going to be an Autumn Statement for growth, then we have to show the country there is a path to a lower tax economy,” he added.
According to the Health Foundation’s analysis of ONS figures, 3.9 million working-age people who are not working and not looking for work reported having work-limiting health issues, although only 2.6 percent said that’s the primary reason they were not in work.
The Bank of England’s latest projection suggests inflation may fall back to near 3 percent by the end of next year, slightly above the two percent target.
To bring inflation down, the bank has raised base interest rates from a record-low 0.1 in December 2021 to 5.25 in August this year, and economists are not expecting more hikes.
The UK’s public debt was almost £2.6 trillion in September or around 97.8 percent of GDP. The interest payable on central government debt was £700 million.
Apart from Wednesday’s budget, Mr. Hunt is expected to have one more chance to deliver tax cuts ahead of the next general election.
The chancellor previously said artificial intelligence and welfare reforms can help break the “vicious circle of ever-rising taxes” by boosting productivity.
