i morning briefing: Jeremy Hunt’s pre-Budget warnings 

Welcome to Tuesday’s Early Edition from i.

Next week Jeremy Hunt will deliver what may be this government’s last Budget before the next election. For weeks, if not longer, it has been speculated that the Chancellor will use it to announce further tax cuts in a bid to help woo voters at the next general election – which is expected this year. But warnings against doing so have also been following that speculation – from how they might affect the funding of public services to what it might mean for an incoming Labour government. Now the IFS, a well-respected think tank, has come out with a fresh message for Mr Hunt. And later this week the Office for Budget Responsibility will deliver its final pre-Budget forecast. What warnings is Mr Hunt being asked to heed? We’ll take a look after the headlines.

 Today’s news, and why it matters

 The UK’s “net zero” industries, from renewable energy to green finance and recycling, contributed £74bn to the economy last year. The industries grew 9 per cent in 2023, according to a report, which also warns the UK has “chopped and changed”.

Thousands of children are stuck on waiting lists for treatment for eating disorders as NHS services remain “massively overstretched and underfunded”, a leading eating disorder charity has warned. Beat said the number of cases was still rising following the 300 per cent spike in demand for help it saw in the aftermath of the Covid pandemic.

Rishi Sunak has called for Western nations to be “bolder” in seizing frozen Russian assets and sending the proceeds to Ukraine to help finance their defence. But questions have been raised by some banks in the UK, who have warned the continued seizure of assets risks London’s reputation as an international financial centre,

Lee Anderson is set to remain a prominent figure on GB News, according to insiders, as Ofcom weighs up whether his inflammatory claim that “Islamists” have “got control over London” merits a new investigation into the channel. GB News sources said bosses will stand by the former Conservative deputy chairman, whose remarks have prompted a row over Islamophobia within the party.

Industry leaders have urged the Government to bring forward legislation to create the flagship “Great British Railways” body as soon as possible, after i revealed 200 staff already on full pay are “sat around, twiddling their thumbs”. The rail plans, which were first outlined in 2021 under Boris Johnson, have only been published as draft legislation and are unlikely to make it onto the statute book by the next election.

How the Tories said £4.7bn HS2 cash will be spent – and the reality. The North of England is being allocated £2.5bn and the Midlands £2.2bn of funding available since the northern leg of HS2 was axed.

Three questions facing Jeremy Hunt:

How will he pay for a tax cut? While the Conservatives pile on pressure for Jeremy Hunt to slash taxes, the IFS has a different message. It is warning that unless the Chancellor can show how he will pay for tax cuts, he shouldn’t implement them. Its director, Paul Johnson, told reporters: “We have huge backlogs in the justice system, local authorities going bust left, right and centre, huge waiting lists in the health service, universities that are increasingly genuinely starting to struggle with 10 years of frozen income, a social care sector which is struggling … a prison system which is full, and so on.” Martin Miklos, research economist at the IFS, said: “In November’s autumn statement, the Chancellor ignored the impacts of higher inflation on public service budgets and instead used additional tax revenues to fund eye-catching tax cuts. At next week’s Budget, he might be tempted to try a similar trick, this time banking the higher revenues that come from a larger population while ignoring the additional pressures that a larger population will place on the NHS, local government and other services. He might even be tempted to cut back provisional spending plans for the next Parliament further to create additional space for tax cuts. The Chancellor should resist this temptation. Until the Government is willing to provide more detail on its spending plans in a spending review, it should refrain from providing detail on tax cuts.” The IFS also said if the Mr Hunt was determined to cut taxes, it would be better for growth to cut stamp duty on purchases of property and shares rather than cutting income tax or national insurance. Meanwhile the Times reports that he will use the Budget to cut national insurance, while announcing a levy on vaping. Expect more Budget leaks as next Wednesday edges closer.

Can he make a cut without slashing spending? Mr Hunt is still clinging to the hope of a 2p cut in personal tax in next week’s Budget without having to cut spending, Arj Singh reports. The roughly £13bn of so-called headroom – the amount of money Mr Hunt has to spend against a promise to get debt falling in five years – means 2p cuts to either income tax, at a cost of £13bn, or national insurance, at £9bn, are “unaffordable” next week, a Treasury source said. However all eyes will be on Friday’s OBR forecast, which will trigger a “last-ditch” attempt to piece the Budget together at the weekend. Read the full story here.  

Why is he facing a Parliamentary investigation? And on top of those, Jeremy Hunt also faces another serious matter. But this time it’s not over the Budget, but instead for breaking MPs’ rules by offering access to the House of Commons for school fundraising. Parents at his children’s school could pay for “traditional English tea for 2-4 people in the House of Commons” with the Chancellor and his wife Lucia, David Parsley reports. After being contacted by i with evidence of the rule breaches, he referred himself to the Parliamentary Commissioner for Standards. Read the full story here.

Around the world

 Trump’s team is shifting strategy – and it’s already working. Trump’s making significant inroads among minority groups, especially among Black men, writes Andrew Buncombe.

Joe Biden has said he hopes a ceasefire between Israel and Hamas that would allow for remaining hostages held in Gaza to be released can take effect by Monday. Asked when he hoped such a deal could be finalised, the US President said: “My national security adviser tells me that they’re close. They’re close. They’re not done yet. My hope is by next Monday we’ll have a ceasefire.”

‘You are dead or you are raped’: Women reveal Russian sexual violence in Ukraine. Ukraine’s women are slowly beginning to reveal horrific acts of sexual violence they say have been carried out against them by Russian soldiers.

A decision to uninvite police from Sydney’s iconic Mardi Gras parade this year has divided Australians. Organisers said the call was made to give the LGBTQ+ community “space to grieve”, after a New South Wales Police officer was charged with murdering a gay couple last week.

Sweden has cleared the final hurdle to joining Nato, after Hungary’s parliament approved its bid to join the military alliance. The Nordic country applied to join Nato following Russia’s invasion of Ukraine in 2022, marking an end to a policy of neutrality held since the 1800s.

 Watch out for…

 Former Post Office chairman Henry Staunton, who will face questions from MPs at a parliamentary select committee. Mr Staunton has been involved in an ongoing row with Kemi Badenoch  

 Thoughts for the day

 Farewell Lee Anderson, you were never really the Red Wall spokesman. He finally found his party’s limit, even if he is yet to discover his own, writes Mark Wallace.

MPs know exactly what they’re doing when they make Islamophobic remarks. Islamophobia in Britain is not a new phenomenon – but now it has reached fever pitch, says Mohammed Zaheer.

Why I want my husband to pay more of the mortgage than I do. Women’s products are more expensive than those for men, argues Julie Cook.

Culture Break

  ‘Working-class actors can’t afford to act any more’. Sally Lindsay on co-writing and producing her own detective series, inequality in the industry, and how drama can change the world

The Big Read

 ‘Bullies threaten to throw nuts at my allergic 9-year-old to see if she will die’. As research reveals 58 per cent of parents of kids with allergies have had ‘near misses’ at school, one mum tells Aasma Day about her daughter’s torment.

Sport

 Tottenham’s Beth England: We made history beating Arsenal – we can do it again. Beth England speaks to i’s Katherine Lucas about her return from hip surgery, why Spurs fear no one in the WSL and being inspired to ‘find the positives’ in every day.

Something to brighten your day

 I ditched my life plan and I’m happier than I ever thought possible. I’m about to turn 34 and I am not married or pregnant. I don’t have the glamorous career I craved, or the bestselling novel. But I’m happy.