UK Chancellor Jeremy Hunt, who has faced pressure from fellow Tory politicians to ease a record-high tax burden, announced tax cuts on Wednesday, as expected, as he seeks to woo voters ahead of this year’s general election.
In his budget statement, Hunt told members of Parliament: ‘Because we are delivering the prime minister’s economic priorities, we can now help families not just with temporary cost-of- living support but with permanent cuts in taxation.
‘We do this to give much needed help in challenging times. But also because Conservatives know lower tax means higher growth.
‘And higher growth means more opportunity, more prosperity and more funding for our precious public services.’
He also hoped to impress voters with positive economic forecasts.
Updated forecasts from the Office for Budget Responsibility, show that inflation in the UK will fall below the Bank of England’s 2% target in ‘just a few months time’, Hunt said
He told MPs: ‘When the prime minister and I came into office, it was 11%. But the latest figures show it is now 4%, more than meeting our pledge to halve it last year. And today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time, nearly a whole year earlier than forecast in the autumn statement.’
Meanwhile, the OBR expects the economy to grow by 0.8% this year and 1.9% next year.
The budget is likely to be the last one before the UK goes to the polls in a general election, so the Conservatives will be hoping to impress voters.
To win over voters, the chancellor announced tax cuts.
Hunt said he will continue to freeze alcohol duty, extending the freeze to February 2025. The chancellor said that this policy will benefit 38,000 pubs across the UK.
Hunt also said he will freeze fuel duty for next five months and maintain the 5p fuel cut.
The chancellor said that these two measures paired together also will contribute to a faster path towards the Bank of England 2% inflation target.
Hunt also announced a new ‘British Isa’, giving investors a £5,000 extra tax-free allowance to ‘encourage more people to invest in UK assets’.
‘This will be on top of the existing Isa allowances and ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand,’ he told MPs.
Hunt said he will proceed with a retail sale for part of the government’s remaining NatWest Group PLC shares this summer at the earliest, subject to market conditions and value for money.
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