Finance Minister Jeremy Hunt, in his hotly anticipated inaugural Autumn Statement, unveiled a sweeping £55 billion ($66 billion) fiscal plan.
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U.K. Finance Minister Jeremy Hunt on Friday said that the government will look to cut taxes “as soon as we can afford to,” amid pressure from some lawmakers in his own party to reduce the country’s levies.
Hunt will present his first full budget on March 15, as the country continues to grapple with high food and energy costs, widespread industrial action, the fallout from Brexit and the worst growth outlook among the G-20 major economies.
The ruling U.K. Conservative Party has an electoral mountain to climb ahead of next year’s general election, with polls consistently indicating a landslide for the main opposition Labour Party. The latest YouGov poll on Tuesday put Labour 28 points ahead of the Conservatives.
Speaking to CNBC’s Tanvir Gill on the sidelines of the G-20 meeting in Bengaluru, India, on Friday, Hunt remained optimistic that his economic plans would regain the public’s trust.
“When the election comes, I think people will see that, when it comes to taking the tough and difficult decisions, to bring responsibility back to public finances, to get inflation down, to get the economy growing, then that’s the Conservative Party,” he said.
“We are the party that, in the end, will build an economy that can put more funding into our National Health Service, that can support our Armed Forces so that they can do their very important work, that can keep taxes low, we think those are the things that matter to most people.”
Asked if taxes will be lower by the time the election rolls around, Hunt said “as soon as we can afford to, yes.”
Plans for ‘most competitive’ business tax rates
He also vowed to eventually reduce business taxes, which will increase from 19% to 25% for the financial year beginning April 1.
“The trajectory we want to get on, particularly when it comes to businesses, is to have more competitive levels of business taxation,” Hunt said.
“We’ll look carefully at any changes that we’re able to make within the constraints of being responsible with public finances, but the long-term ambition is to have nothing less than the most competitive business tax rates anywhere.”
In his Autumn Statement in November, Hunt delivered a slew of tax rises and spending cuts as he set out to plug a substantial hole in the country’s public finances.
The sweeping £55 billion ($66 billion) fiscal plan sought to restore the country’s credibility under Prime Minister Rishi Sunak’s government, after the chaos unleashed by former leader Liz Truss’ disastrous “mini-budget” in late September.
A marked improvement in the public finances and a sharp reduction in wholesale gas prices since Hunt took office propelled the government to a surprise £5.4 billion budget surplus in January.
Hunt earlier this week dismissed suggestions that he had been handed a “windfall” due to the falling cost of the Energy Price Guarantee to support household energy bills, and indicated that he will resist calls from backbenchers within the Conservative Party to cut taxes this time around. The U.K. tax burden currently hits at a 70-year high.
Speaking at a green industry conference in London on Tuesday, Hunt argued that the falling costs of the Energy Price Guarantee was being offset by a fall in the windfall taxes on the excess profits of energy prices, meaning a much smaller net expanse in the government’s coffers.
“The most important thing is this was a one-off one-year cost only. To make permanent changes in tax and spending that are recurring, year in, year out, you need a more fundamental change in national policies,” he said.
