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Chancellor Jeremy Hunt plans to further cut public spending to boost tax breaks in Budget

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Jeremy Hunt is considering another last-minute cut in public spending to increase tax relief in Wednesday’s Budget.

The Politics At Jack And Sam podcast, out now, explains how Numbers 10 and 11 have spent recent days finding as many different ways as possible to raise future revenues in order to increase the size of the tax cuts from Wednesday.

National Insurance could be cut by another 2p in the Budget if the Chancellor can find the right mix of revenue-raising measures and spending cuts.

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Currently, spending is expected to increase 1% above inflation after next year. However, if this amount was reduced to 0.75% above inflation, it would raise £5-6 billion.

The chancellor hopes to resist questions about where he will cut, saying he is pursuing an efficiency drive and that decisions will be presented in a future spending review after the election.

The decision on whether to cut future spending was made at the Treasury as recently as Friday, and this morning the Chancellor debated the importance of finding efficiencies.

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What do people want in the budget?

This is likely to reinforce Labor’s accusation that the government is “maxing out the credit card” to keep its own supporters on its side.

However, most conservatives in government believe it is a necessary compromise to allow the party to go into the next election as the low-tax party.

Some high-ranking conservatives disagree, however, fearing that the public is more concerned about the state of public services than tax cuts.

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The 2024 budget explained

The budget is likely to include cuts or the abolition of non-dom status, which could bring in £2-3 billion, as well as other small gaps plugged, generating a few hundred million in revenue.

Learn more:
Any tax cuts will have to be ‘rolled back’ after election, economist says
Unfunded tax cuts are ‘deeply unconservative,’ Hunt says
When is the budget – schedules and how to watch

The Politics At Jack And Sam’s podcast also reveals how deferring tainted blood compensation payments contributed to tax cuts.

In January, the Treasury was concerned that these payments would reduce the amount the chancellor could spend before reaching the borrowing limits set by its budget rules.

However, the inquiry will not report until later and the government is resisting calls for interim payments.

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