Chancellor says ‘everything on the table’ in autumn statement as he promises to remove tax ‘barriers’ for business
Chancellor Jeremy Hunt says “everything is on the table” when it comes to tax cuts in this week’s autumn statement.
Speaking to Sky News’ Sunday Morning with Trevor Phillips, Mr Hunt said his speech on Wednesday would focus on growth, and pledged to “remove the barriers that stop businesses growing”.
Politics live: Chancellor facing questions ahead of autumn statement
But he did not rule out other rumours that have been swirling around Westminster this weekend, including a reduction in inheritance tax and changes to personal taxation.
“I am not going to talk about any individual taxes as that will lead to even more feverish speculation,” he said.
But the chancellor admitted the tax burden is “too high” and the government “wants to bring it down”, with lower tax “essential to growth”.
“I think it is important for a productive, dynamic, fizzing economy that you motivate people to do the work [and] take the risks that we need,” he added.
Labour: Tax cuts must be ‘affordable’
Labour’s shadow chancellor Rachel Reeves told Trevor Phillips she would welcome tax cuts for working people, but called on the government to “explain where the money is going to come from”.
She added: “Last year when the Conservatives had a load of unfunded tax cuts, it crashed the economy [and] sent mortgage rates soaring.
“So I want taxes on working people lower, but it has to be affordable.”
But the head of the Institute for Fiscal Studies, Paul Johnson, warned there was “no headroom there at all” for major tax cuts due to the poor state of public finances.
Can the chancellor lift the gloom? Watch live coverage on Sky News of the autumn statement from 11am on Wednesday.
Shadow chancellor Rachel Reeves said any plan for tax cuts ‘has to be affordable’
Under the Tories, tax levels are at their highest since records began – with Ms Reeves pointing to 25 hikes since 2019 – and backbench MPs have been demanding cuts from the government ahead of the next election.
But Mr Hunt and Prime Minister Rishi Sunak have been resisting the calls for the past 12 months, saying their priority was to lower inflation – which also stood at a record high of 11% last autumn.
Earlier this week, the Office for National Statistics confirmed that figure had now dropped to 4.6%, seeing the Conservative pledge to halve inflation by the end of the year met.
But it still sits at more than double the Bank of England’s target of 2%.
The chancellor reiterated his pledge to not introduce any tax cuts that “fuel inflation”, saying: “We have done all this hard work we are not going to throw that away.”
But he did not write off the prospect of lowering taxes in the autumn statement, saying the Conservatives “need to show there is a path to a lower tax economy”.
“We believe lower taxes are essential for a high growth economy, so we do want to bring down the tax burden, but we will only do so responsibly,” he added.
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Sky News understands Rishi Sunak and Jeremy Hunt are holding multiple meetings over the weekend ahead of Wednesday’s autumn statement
Mr Hunt indicated the focus during Wednesday’s speech would be on business, calling it “an autumn statement for growth… to turn a corner” on the economy.
“If we are going to embrace those opportunities we need to remove the barriers that stop businesses growing and that’s why this autumn statement will be focused on growth,” he said.
But pushed on whether there would be changes to either National Insurance or income tax, he hinted at a longer wait, saying: “If you want to bring down personal taxes the only way to do that sustainably is to spend public money more efficiently… Rome wasn’t built in a day, these things take time.”
Speaking about the current economic situation to Trevor Phillips, the IFS’ Mr Johnson said there had been “some good news” for the Treasury this year as tax revenues were “coming in more strongly” – meaning the government would have to borrow less to fund public services.
And that in turn would help the chancellor meet his target to have the country’s debt falling in the next five years.
But, the economic expert added: “At the budget back in March [debt was forecast to be] falling by £6bn in five years.
“Now, £6bn in five years out of a £1tn budget is nil. I mean, there is no headroom there at all… and that’s probably roughly where he’s going to be still [on Wednesday].”
The IFS chief said “chancellors can always find a few billion in a budget or an autumn statement if they want to”, but the public finances are “in such a mess” due to the amount being spent on debt interest.
“But there’s always choices,” he added.
Mr Johnson urged that choice not to be cutting inheritance tax, however, adding: “I think it would be a very odd statement of priorities that you’re going to hit hard if they earn the money but help them out if they inherited it.”
Sky News understands multiple meetings are taking place this weekend between Mr Hunt and Mr Sunak to finalise the details ahead of Wednesday’s announcements.
Sir Keir Starmer has said his government stands ready to use industrial policy to “shelter British business from the storm” after Donald Trump’s new 10% tariff kicked in.
The UK was among a number of countries hit with the lowest import duty rate following the president’s announcement on 2 April – which he called ‘Liberation Day’, while other nations, such as Vietnam, Cambodia and China face much higher US levies.
But a global trade war will hurt the UK’s open economy.
The prime minister said “these new times demand a new mentality”, after the 10% tax on British imports into America came into force on Saturday. A 25% US levy on all foreign car imports was introduced on Thursday.
It comes as Jaguar Land Rover announced it would “pause” shipments to the US for a month, as firms grapple with the new taxes.
On Saturday, the car manufacturer said it was working to “address the new trading terms” and was looking to “develop our mid to longer-term plans”.
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Jobs fears as Jaguar halts shipments
Referring to the tariffs, Sir Keir said “the immediate priority is to keep calm and fight for the best deal”.
Writing in The Sunday Telegraph, he said that in the coming days “we will turbocharge plans that will improve our domestic competitiveness”, adding: “We stand ready to use industrial policy to help shelter British business from the storm.”
It is believed a number of announcements could be made soon as ministers look to encourage growth.
NI contribution rate for employers goes up
From Sunday, the rate of employer NICs (national insurance contributions) increased from 13.8% to 15%.
At the same time, firms will also pay more because the government lowered the salary threshold at which companies start paying NICs from £9,100 to £5,000.
Also, the FTSE 100 of leading UK companies had its worst day of trading since the start of the pandemic on Friday, with banks among some of the firms to suffer the sharpest losses.
Sir Keir said: “This week, the government will do everything necessary to protect Britain’s national interest. Because when global economic sands are shifting, our laser focus on delivering for Britain will not. And these new times demand a new mentality.”
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Trump defiant despite markets
UK spared highest tariff rates
Some of the highest rates have been applied to “worst offender” countries including some in Southeast Asia. Imports from Cambodia will be subject to a 49% tariff, while those from Vietnam will face a 46% rate. Chinese goods will be hit with a 34% tariff.
Imports from France will have a 20% tariff, the rate which has been set for European Union nations. These will come into effect on 9 April.
Read more:
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How will UK respond to Trump’s tariffs?
Sir Keir has been speaking to foreign leaders on the phone over the weekend, including French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni and Australian Prime Minister Anthony Albanese, to discuss the tariff changes.
A Downing Street spokesperson said of the conversation between Sir Keir and Mr Macron: “They agreed that a trade war was in nobody’s interests but nothing should be off the table and that it was important to keep business updated on developments.
“The prime minister and president also shared their concerns about the global economic and security impact, particularly in Southeast Asia.”
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Trump’s warning
Mr Trump has warned Americans the tariffs “won’t be easy”, but urged them to “hang tough”.
In a post on his Truth Social platform, he said: “We are bringing back jobs and businesses like never before.
“Already, more than FIVE TRILLION DOLLARS OF INVESTMENT, and rising fast!
“THIS IS AN ECONOMIC REVOLUTION, AND WE WILL WIN. HANG TOUGH, it won’t be easy, but the end result will be historic.”
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