© Reuters. FILE PHOTO: FILE PHOTO: Britain’s Chancellor of the Exchequer Jeremy Hunt leaves Downing Street in London, Britain September 13, 2023. REUTERS/Toby Melville/File Photo
LONDON (Reuters) – British Finance Minister Jeremy Hunt said on Sunday he would not implement tax cuts that could drive up inflation, days before announcing a major budget update that is expected to contain tax cuts.
The Sunday Times reported that Hunt was considering cuts to income tax or national insurance in his autumn budget update on Wednesday.
Hunt is due to deliver his autumn statement on November 22, hoping to revive the fortunes of a stagnant British economy and the ruling Conservative Party ahead of elections due next year.
“The one thing we won’t do is any tax cuts that would fuel inflation,” Hunt told Sky News.
Asked if he would cut inheritance tax – a move which the Sunday Times warned could be delayed due to bad press – Hunt replied that “everything is on the table” ahead of his statement.
Rachel Reeves, Labor’s finance spokeswoman, said cutting inheritance tax would not be a good priority in a cost of living crisis.
“A tax cut on workers – if the government can explain where the money is coming from – is something I would support,” Reeves told Sky News.
Hunt’s options are limited after the state’s heavy spending for the COVID-19 pandemic and soaring energy prices last year. Public debt today represents almost 100% of economic production, more than three times its volume 20 years ago.
Still, official forecasts due next Wednesday are expected to show Hunt has more room to make gifts before running into trouble with budget rules than in his annual budget released in March.
Hunt said the only way to reduce personal taxes was to spend public money more efficiently.
“I want to reduce our tax burden. I think it’s important for a productive, vibrant, vibrant economy to motivate people to do the work and take the risks that we need,” he said .