Autumn statement: Jeremy Hunt signals tax cuts next week as lower inflation means economy has ‘turned a corner’
Jeremy Hunt has said there is the chance to lower taxes in the autumn statement next week, arguing the economy had “turned a corner”.
But he argued that there is a need to “reform our welfare system” and the “priority” is helping firms.
Mr Hunt is also considering slashing inheritance tax, which would be bound to draw criticism for supporting the wealthy while others struggle with the high cost of living.
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“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 told the Telegraph.
“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.”
Mr Hunt also said he was “personally uncomfortable” with the UK’s tax burden, saying: “Taxes are too high and we need to bring that down.”
The Institute of Fiscal Studies (IFS) said in September that the tax burden is on course to rise from 33% of GDP in 2019 to 37% next year.
The group said it would mark the largest jump in the tax burden during a parliament outside of wartime.
Mr Hunt pointed to “the most dynamic, energetic, thriving economies” in North America and Asia “where they generally have lower tax burdens” as what he sees as the UK’s “benchmark”.
According to the Telegraph, Mr Hunt and Rishi Sunak could cut inheritance tax from 40% in the autumn statement.
HMRC says only 4% of estates paid inheritance tax in 2021.
Conservative former chancellor Lord Clarke said the move may please MPs on the Tory right who are clamouring for tax cuts as the party lags more than 20 points behind Labour in the polls, but others would find it “appalling”.
Lord Clarke told Times Radio: “Well, it’s not the tax cut I would choose. Indeed, I’m not sure he’s got any room for tax cuts.
“And choosing inheritance tax at the present time might appeal to the Conservative right, but it leaves them open to the most appalling criticisms when inflation and the state of affairs is making poorer people in this country very vulnerable indeed, giving tax relief to those families that are lucky enough to have members of it with capital above the limit through inheritance tax and pay any significant amount of tax on the inheritance.
“And I’m not sure that the economic and financial state of the country justifies it.”
Labour leader Sir Keir Starmer said he would wait to see what is in the autumn statement before commenting on any plan to cut inheritance tax, stressing that he wanted to see “a serious plan for growth”.
When asked explicitly by the Telegraph if tax cuts will feature in his budget, Mr Hunt did not directly respond.
He said: “Without pre-empting the decisions that the prime minister and I make, this is an autumn statement for growth. It’s a turning point for the economy.”
On Friday, Mr Hunt said the best way to reduce the “tax burden for everyone” is to grow the economy, touting manufacturing as part of the “next part of the economic plan”.
Elsewhere in the Telegraph interview, Mr Hunt said he would stand as an MP at the next election, despite speculation that he could quit.
The Liberal Democrats are eyeing the Surrey seat he will contest.
“I’m aware that it’s the fight of my life, but I’m up for that fight and I’m very confident that I will be back in parliament after the next election,” he said.
UK weather: New warnings issued as 1,500 properties still without power
Around 1,500 homes and businesses are still without power after heavy snow caused major power cuts in Cumbria.
It came as much of the country was hit by cold and wet conditions over the weekend, including a low of -12.5C recorded in northern Scotland overnight.
Freezing conditions are forecast to continue on Monday and the Met Office has issued new yellow weather warnings for snow, ice and rain.
Cumbria was one of the worst affected regions over the weekend, with up to 30cm of snow falling in places.
Officials declared a major incident in the county on Saturday and advised people not to travel unless necessary.
Dozens of motorists in the Lake District were forced to abandon their cars overnight. Many were forced to seek refuge in local community centres, primary schools and a church.
Electricity North West said its engineers had been “battling treacherous conditions” throughout the weekend and were still working on restoring supplies on Sunday evening.
Another 7,500 homes and businesses have been reconnected after earlier being hit by power cuts.
The weather also caused disruption to travel, including at East Midlands Airport, which was forced to temporarily close its runway on Sunday.
It came after some flights were cancelled at Glasgow Airport and London Stansted Airport on Saturday.
The Met Office’s new weather warnings include alerts for ice across much of northern England and parts of the Midlands, as well as snow for higher areas of Wales and the Peak District.
The weather agency said there was a risk that snow will lead to major travel disruption and there could be “accumulations of 2cm to 5cm on some roads above around 150m, and perhaps 10cm to 15cm on roads above around 350m”.
The warning runs from Sunday evening until 12pm on Monday.
The Met Office also issued a yellow weather warning for rain across parts of southern Wales and southwest England, with the alert due to come into force from midnight and run until 6pm on Monday.
Forecasters said there was a risk of flooding to some homes and businesses, as well as potential disruption to train and bus services.
The RAC warned northern parts of the country were facing an “ice rink on Monday as snow refreezes overnight” and advised motorists to take care.
Spokesperson Simon Williams said: “We’re expecting some very treacherous icy conditions in northern parts, so those who have to drive should exercise great caution.
“If it’s possible to delay or even abandon journeys that may well be the best option.”
However, Met Office meteorologist Tom Morgan said the weather would likely become milder later in the week.
He added: “So there is an end in sight to the wintry weather.”
Rishi Sunak suggests more tax cuts are on the way – but refuses to commit to triple lock manifesto pledge
Rishi Sunak has suggested more tax cuts are on the way because the economy has “turned a corner”.
The prime minister told reporters that while he would not comment on specifics, trimming taxes was “the direction of travel from this government”.
But it came as he refused to say if the pensions triple lock would be in the next Conservative Party manifesto – despite Downing Street insisting in September that it was “committed” to the policy.
Mr Sunak’s comments echo similar remarks by his ministers in recent weeks.
Chancellor Jeremy Hunt also said last month that the economy had “turned a corner” just before he unveiled a cut to National Insurance in the Autumn Statement.
However, four million people could also end up paying higher taxes if their wages rise after the government decided to continue the freeze on tax thresholds.
Reports suggest the Conservatives are considering additional cuts in 2024 as the party tries to woo voters and reduce Labour’s 20-point lead in opinion polls ahead of the next general election, which must take place by January 28 2025.
Cuts to stamp duty and inheritance tax are among the options reportedly being looked at by ministers.
When asked about the two policies, Mr Sunak said: “I would never comment on specific taxes. But what I will just say, though, is we have turned a corner.
“We have got inflation down, as I said we would, we have grown the economy and we are now focused on controlling spending and controlling welfare so we can cut taxes. So when we can do more, we will.”
He added: “We want to grow the economy, we want to reward people’s hard work and aspirations and cut their taxes responsibly. That is the direction of travel from this government.
“If you want controlled public spending, controlled welfare and your taxes cut, then vote Conservative.”
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Mr Sunak was unable to make similar promises about the triple lock, which ensures the state pension must rise every April by whichever is highest out of average earnings, inflation or 2.5%.
The policy has come under fire in recent months by critics who claim it has become too expensive and gives the government less financial “headroom” to deal with economic shocks.
Some senior Tories have called for it to be scrapped and Labour has refused to guarantee the triple lock will remain in place if it wins the next election.
While the government continued with the policy in its recent Autumn Statement, ensuring the state pension will rise by 8.5% in April 2024 to £221.20 a week, Mr Sunak refused to be drawn when asked directly if it would be in the next Tory manifesto.
Speaking to journalists as he flew between the UK and Dubai for the COP28 summit, he replied: “[I’m] definitely not going to start writing the manifesto on the plane, as fun as that would be.”
Mr Sunak acknowledged there had been “some scepticism” about if policy was going to form part of the Autumn Statement, but said its inclusion had been “a signal of our commitment to look after our pensioners who have put a lot into our country”.
Reindeer block dual carriageway in Suffolk
A major road was closed by police in both directions after a “large number” of reindeer wandered in front of traffic.
Police were called to the scene, on the A11 near Barton Mills in Suffolk, at around 3.20pm on Sunday.
National Highways East said no traffic had been able to pass due to the “large number” of the animals on the road and added that police had been “trying to catch them”.
The reindeer eventually left the road at around 5.20pm and it was reopened shortly afterwards, officials said.
In an update on X, formerly Twitter, National Highways East confirmed police closed the A11 “in both directions between A1134 and A1101”.
There are not thought to be any wild reindeer in England and it is unclear where the animals came from.
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