UK PM rules out big tax cuts as he focuses on reducing inflation

UK Chancellor Jeremy Hunt has ruled out a “substantial” tax cut in the next budget, making keeping inflation a top priority.

In a speech at Bloomberg’s London headquarters on Friday, Hunt suggested that tax cuts will have to wait, and that lowering inflation was “the only sustainable way to restore industrial harmony” in the UK. Stated.

“My party understands better than others the importance of low tax rates in creating incentives and fostering the animal spirit that drives economic growth.

“Another conservative insight is that risk-taking by individuals and businesses is only possible if the government provides economic and financial stability. is a decline in

Speaking to the BBC after his speech, the prime minister said it was “unlikely” that there would be room for “substantial” tax cuts in the next budget due in March.

Hunt, who took over as prime minister after former prime minister Liz Truss’ plan to cut massive government-borrowed tax cuts led to turmoil in financial markets, said Britain was determined to show it was responsible. .

It means “showing the world and showing the market that we are a responsible country, that we can pay our way and balance the books,” he said. .

tax controversy

The latest figures released by the Office for National Statistics (ONS) show that public sector borrowing in the UK will reach £27.4bn in December 2022, the lowest in December since monthly records began in January 1993. recorded the highest value.

The figure was £16.7bn higher than the same month last year. This is largely due to a surge in spending on energy support programs and rising debt interest rates.

Debate continues within the ruling Conservative Party over how to develop the economy and improve public finances.

Last week, Tory lawmakers who support Truss’ tax cuts met for the first time as part of a “conservative growth group.”

In a Daily Mail article, former Tory leader Sir Ian Duncan-Smith argued that the country was “already overburdened and clearly cannot get out of recession”.

“Disciplined Approach”

But Prime Minister Rishi Sunak claimed he wanted tax cuts, but argued that the COVID-19 pandemic and Russia’s war in Ukraine meant he could not yet do so.

During a visit to Lancashire on 19th January, he said: Now this war is underway, and it is having a huge impact on inflation and interest rates. “

Snack said it would take “a bit of work” to get the financial position “where it should be.”

In Thursday’s cabinet absence, Hunt warned that the government must maintain a “disciplined approach” to finances.

Both Snak and Hunt stressed that inflation was only projected to fall due to “tough decisions” made in their autumn statements to stabilize the economy.

“The Prime Minister said this disciplined approach needed to be maintained to keep inflation under control as it was the biggest driver of inflation,” according to meeting materials released by 10 Downing Street. .


In his Bloomberg speech, Hunt also laid out plans for Brexit to be a “catalyst” for growth, and announced measures to boost prosperity in the southeast of England and beyond London.

The prime minister has declared that the country’s economy has “grown almost as fast as Germany” since the 2016 Brexit referendum, and said he wanted to reverse what he called Britain’s “declineist” attitude.

He said Brexit should be viewed as an opportunity to “create a more innovation-friendly and growth-focused economic environment”.

Referring to the government’s so-called leveling agenda, Hunt said the weakness of the economy was “the excessive concentration of wealth in the southeast”.

Level Up, he said, constitutes one of the so-called ‘E’ four pillars, which assess growth policies in business, education, employment and all sectors.

It promised to provide “high-potential but poorly-performing areas” with “favorable financial measures to attract new investment,” and said work to identify their locations would begin soon. .

As part of his ‘Employment’ pillar, Hunt encouraged those who left the workforce during the COVID-19 pandemic to return, saying ‘Britain needs you’ .

He said he would ensure that “the necessary conditions to make work worthwhile” are in place so that returning to work would be an attractive proposition.

Speaking of Hunt’s speech, Labour’s shadow prime minister, Rachel Reeves, said:

“The Tories have no plans for now, no plans for the future. The time has come for a Labor government to build a better Britain.”

PA Media contributed to this report.