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The International Monetary Fund (IMF) has said Jeremy Hunt should not be planning to cut taxes any time soon.

In what will be seen as a bombshell intervention ahead of this year’s election, the Fund, widely regarded as the world’s most authoritative economic body, said its analysts had advised the UK Treasury not to cut taxes.

And, in a further blow to the chancellor, it expressed scepticism about his spending plans for the coming years, raising questions about his ability to meet his own fiscal rules.

The comments, issued alongside the Fund’s latest update to its economic forecasts, comes after the chancellor signalled that he plans to cut taxes in March’s spring Budget.

British Chancellor of the Exchequer Jeremy Hunt speaks at the Resolution Foundation, in London, Britain December 4, 2023. REUTERS/Hollie Adams
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Chancellor Jeremy Hunt has hinted at tax cuts this year. Pic: Reuters

An IMF spokesman said: “As noted in the 2023 Article IV consultation, preserving high-quality public services, and undertaking critical public investments to boost growth and achieve the net zero targets, will imply higher spending needs over the medium term than are currently reflected in the government’s budget plans.

“Accommodating these needs… will already require generating additional high-quality fiscal savings, including on the tax side.

“The IMF has recommended strengthening carbon and property taxation, eliminating loopholes in wealth and income taxation, and reforming the pensions triple lock.

“It is in this context that staff advises against further tax cuts.”

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The comments came as the Fund cut its forecast for UK growth next year, from 2% to 1.6%.

However, the UK is no longer forecast to be the slowest growing economy among the Group of Seven industrialised nations, after the Fund cut its outlook for Germany this year to 0.5% – below Britain’s (unchanged) 0.6% forecast.

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Chancellor aims to cut taxes

However, it is the IMF’s comments on taxation which will most upset the Treasury.

Mr Hunt has said repeatedly that he plans to cut taxes in future fiscal events.

Many inside the Conservative Party believe tax cuts are their strongest hope of improving their polling ahead of the general election.

That those tax cuts are seen by the world’s leading economic authority as an imprudent move will undermine the chancellor’s case.

The chancellor said: “The IMF expect growth to strengthen over the next few years, supported by our introduction of the biggest capital investment tax reliefs anywhere in the world, alongside National Insurance cuts to improve work incentives. It is too early to know whether further reductions in tax will be affordable in the Budget, but we continue to believe that smart tax reductions can make a big difference in boosting growth.”

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Thailand’s 5-year crypto tax break: What they’re not telling you

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Thailand’s 5-year crypto tax break: What they’re not telling you

Thailand’s 5-year crypto tax break: What they’re not telling you

Thailand’s five-year tax break on crypto capital gains looks like a dream for investors, but the fine print reveals a strategic push for surveillance, platform control and regulatory dominance.

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TON’s UAE ‘golden visa’ mishap shows why legal reviews matter

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TON’s UAE ‘golden visa’ mishap shows why legal reviews matter

TON’s UAE ‘golden visa’ mishap shows why legal reviews matter

The TON Foundation could have avoided its golden visa controversy in the UAE with a brief legal review, a local lawyer told Cointelegraph.

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Norman Tebbit: Former Tory minister who served in Margaret Thatcher’s government dies aged 94

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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.

Prime Minister Margaret Thatcher and party chairman Norman Tebbit.
Pic: PA
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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
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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.

Prime Minister Margaret Thatcher with Employment Secretary Norman Tebbit.
Pic: PA
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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.

Norman Tebbit during the debate on the second reading of the European Communities (Amendment) Bill, in the House of Lords.
Pic: PA
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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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