Jeremy Hunt dismisses pleas for tax cuts despite lower borrowing
Jeremy Hunt dismisses desperate Tory pleas for tax cuts in Autumn Statement despite government borrowing coming in £20bn below forecasts – as HMRC rakes in an extra 6%
Jeremy Hunt dismissed desperate Tory pleas for early tax cuts today despite government borrowing coming in lower than expected.
Public sector net borrowing was £14.3billion last month, significantly below the £20billion that had been pencilled in by analysts.
In the year to September the sums racked up were £19.8billion lower than the £101.5billion the OBR watchdog forecast. Debt has also been revised down as a proportion of GDP after the UK’s bounceback from Covid was upgraded.
Separate figures from HMRC show the tax take reached £392.5billion in the first half of the financial year, up 6 per cent on the same period in the previous year.
Receipts of inheritance tax – something many Conservatives want the government to target – were £3.9billion, £400million higher than before.
However, the Chancellor dashed hopes that he might use the wriggle room to act on taxes – given new impetus following disastrous by-election defeats for the Tories.
Mr Hunt said: ‘We had to borrow during the pandemic to protect lives and livelihoods, but since then Putin’s invasion has pushed up inflation and interest rates.
‘This means we spent twice as much on debt interest last year as we did the previous year.
‘This is clearly not sustainable; we need to get debt falling and reduce public sector waste so that those delivering public services can get back to what they do best; teaching our children, keeping us safe and treating us when we’re sick.’
Treasury sources stressed there is still an ‘inflation risk’ attached to tax cuts, saying the Chancellor’s position had not changed.
Jeremy Hunt dismissed desperate Tory pleas for early tax cuts today despite government borrowing coming in lower than expected
In the year to September public sector borrowing was £19.8billion lower than the £101.5billion the OBR watchdog forecast
Separate figures from HMRC show the tax take reached £392.5billion in the first half of the financial year, up 6 per cent on the same period in the previous year
The ONS also said net debt stood at £2.599trillion at the end of September, equalling around 97.8 per cent of UK GDP.
That was is 2.1 percentage points higher than the same time last year – but has been revised down after upgrades to the figures on economic recovery from the pandemic.
Some economists have suggested Mr Hunt might be more likely to deliver tax cuts or giveaways next year due to the figures.
Ashley Webb, UK economist at Capital Economics, said: ‘We continue to think that the Chancellor will have some wiggle room for a few pre-election giveaways in the March budget.
‘But with the full upward impact on borrowing from higher interest rates and weaker GDP growth still coming down the line, any package of pre-election net tax cuts or spending rises will probably need to be modest.’
The loss of the true-blue strongholds in Tamworth and Mid Beds has triggered a fresh wave of introspection among Conservatives, with even those in safe seats concerned about their prospects.
Receipts of inheritance tax – something many Conservatives want the government to target – were £3.9billion over six months, £400million higher than before
Although by-elections are not directly reflected at general elections, a swing of the scale seen overnight could theoretically reduce the Tories to 20 seats.
Ex-Cabinet minister John Redwood tweeted: ‘In the two by elections thousands of Conservative voters in 2019 stayed at home.
‘The Labour vote was similar to 2019. Many people want the government to stop the boats, improve the quality and efficiency of services and cut taxes to get some growth.’
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