Chancellor Jeremy Hunt sets out stall to halt ‘vicious circle’ of tax hikes as pressure mounts
Chancellor Jeremy Hunt has vowed to tackle the “vicious circle of ever-rising taxes” by revamping public services and the welfare system.
The cabinet minister argued the state needed to become “more productive”, not bigger, as he pointed to the use of artificial intelligence to realise frontline efficiencies and reduce the burden on the public purse.
He also said the government was looking at welfare changes, with 100,000 people a year moving off work on to benefits “without any obligation” to look for a job.
Mr Hunt made his comments as the Conservative Party annual conference gets under way in Manchester this weekend, with some senior party figures demanding tax cuts.
It follows a report published this week that said the Tories will have overseen, between the 2019 election and the next general election, the biggest set of tax rises since at least the Second World War.
Analysis by the Institute for Fiscal Studies (IFS) thinktank said taxes will have increased to around 37% of national income, equivalent to around £3,500 more per household.
But despite the growing pressure, Mr Hunt told The Times newspaper: “We’re not in a position to talk about tax cuts at all.”
He added: “We need a more productive state, not a bigger state.”
“We need a state that doesn’t just deliver the services it currently delivers, but actually improves the services it delivers and recognises that there’s going to be more calls on those services with an ageing population,” he said.
“But we need to find a formula that doesn’t mean that we’re on a vicious circle of ever-rising taxes.”
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More than 30 Tory MPs, including Liz Truss, Prime Minister Rishi Sunak’s short-lived predecessor, and former home secretary Dame Priti Patel, have vowed not to back further tax hikes.
Ms Truss, whose mini-budget 12 months ago triggered market turmoil in response to unfunded tax cuts and ultimately forced her from office, tweeted on Friday: “We should always seek to reduce the tax burden, especially when there’s so much pressure on family budgets.”
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In his Times interview, Mr Hunt also called for a more upbeat tone about the economy and said people needed to “shrug off a bit of the pessimism”.
Mr Hunt, who took over from Ms Truss’s sacked chancellor Kwasi Kwarteng, said: “When I started the job there was a lot of doom and gloom about Britain, our prospects.
“What I have realised now nearly a year on is that there is just far too much declinism.
“If you look at the fundamentals of the British economy we have had our setbacks like everyone else, we are the fastest-growing large European country, not just since the pandemic but since Brexit, since 2010.
“That’s a period when we’ve had a once-in-a-century pandemic, a global financial crisis that we were particularly exposed to, and a 1970s-style energy shock. Despite all of that the British economy has been very resilient.”
His remarks came after it was revealed the UK economy grew faster than had first been thought between January and March this year.
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Data published by the Office for National Statistics shows UK economic growth was 0.3% from January to March, better than the 0.1% first announced.
The revision put the country’s economy ahead of both Germany and France in terms of post-pandemic performance but behind allies such as the United States, Canada, Japan and Italy.
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Norman Tebbit: Former Tory minister who served in Margaret Thatcher’s government dies aged 94
Norman Tebbit, the former Tory minister who served in Margaret Thatcher’s government, has died at the age of 94.
Lord Tebbit died “peacefully at home” late on Monday night, his son William confirmed.
One of Mrs Thatcher’s most loyal cabinet ministers, he was a leading political voice throughout the turbulent 1980s.
He held the posts of employment secretary, trade secretary, Chancellor of the Duchy of Lancaster and Conservative party chairman before resigning as an MP in 1992 after his wife was left disabled by the Provisional IRA’s bombing of the Grand Hotel in Brighton.
He considered standing for the Conservative leadership after Mrs Thatcher’s resignation in 1990, but was committed to taking care of his wife.
Margaret Thatcher and Norman Tebbit in 1987 after her election victory. Pic: PA
Tory leader Kemi Badenoch called him an “icon” in British politics and was “one of the leading exponents of the philosophy we now know as Thatcherism”.
“But to many of us it was the stoicism and courage he showed in the face of terrorism, which inspired us as he rebuilt his political career after suffering terrible injuries in the Brighton bomb, and cared selflessly for his wife Margaret, who was gravely disabled in the bombing,” she wrote on X.
“He never buckled under pressure and he never compromised. Our nation has lost one of its very best today and I speak for all the Conservative family and beyond in recognising Lord Tebbit’s enormous intellect and profound sense of duty to his country.
“May he rest in peace.”
Lord Tebbit and his wife Margaret stand outside the Grand Hotel in Brighton. Pic: PA
Tory grandee David Davis told Sky News Lord Tebbit was a “great working class Tory, always ready to challenge establishment conventional wisdom for the bogus nonsense it often was”.
“He was one of Thatcher’s bravest and strongest lieutenants, and a great friend,” Sir David said.
“He had to deal with the agony that the IRA visited on him and his wife, and he did so with characteristic unflinching courage. He was a great man.”
Reform leader Nigel Farage said Lord Tebbit “gave me a lot of help in my early days as an MEP”.
He was “a great man. RIP,” he added.
Lord Tebbit as employment secretary in 1983 with Mrs Thatcher. Pic: PA
Born to working-class parents in north London, he was made a life peer in 1992, where he sat until he retired in 2022.
Lord Tebbit was trade secretary when he was injured in the Provisional IRA’s bombing in Brighton during the Conservative Party conference in 1984.
Five people died in the attack and Lord Tebbit’s wife, Margaret, was left paralysed from the neck down. She died in 2020 at the age of 86.
Before entering politics, his first job, aged 16, was at the Financial Times where he had his first experience of trade unions and vowed to “break the power of the closed shop”.
He then trained as a pilot with the RAF – at one point narrowly escaping from the burning cockpit of a Meteor 8 jet – before becoming the MP for Epping in 1970 then for Chingford in 1974.
Lord Tebbit during an EU debate in the House of Lords in 1997. Pic: PA
As a cabinet minister, he was responsible for legislation that weakened the powers of the trade unions and the closed shop, making him the political embodiment of the Thatcherite ideology that was in full swing.
His tough approach was put to the test when riots erupted in Brixton, south London, against the backdrop of high rates of unemployment and mistrust between the black community and the police.
He was frequently misquoted as having told the unemployed to “get on your bike”, and was often referred to as “Onyerbike” for some time afterwards.
What he actually said was he grew up in the ’30s with an unemployed father who did not riot, “he got on his bike and looked for work, and he kept looking till he found it”.
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