Jeremy Hunt hints inheritance and business tax will be cuts in Autumn Statement
Jeremy Hunt has suggested he is considering cutting inheritance and business taxes in his autumn statement.
Treasury sources said no final decisions have been made, but the Chancellor refused to rule out the move in interviews today.
He told The Telegraph, the economy had “turned a corner” as inflation has halved, adding “this is the moment” to focus on growth and he was uncomfortable with the size of the tax burden.
Mr Hunt also refused to rule out slashing inheritance tax, telling the BBC: “The best way that we can reduce the tax burden for everyone is to grow the economy.”
Mr Hunt also said he was considering a squeeze on benefit payments, saying there is a need to “reform our welfare system” and the “priority” for Wednesday’s financial announcement is helping firms.
According to previous reports Mr Hunt is poised to half inheritance tax and increase council tax in his statement.
When asked if tax cuts were on the horizon, Mr Hunt said: “Without pre-empting the decisions that the Prime Minister and I make, this is an Autumn Statement for growth. It’s a turning point for the economy.”
“What we would never do is risk the progress we’ve made on inflation by doing tax cuts that are inflationary, that take us in the opposite direction,” adding borrowing to fund tax cuts would also not work, a nod to Ms Truss.
“Within that context, I suppose the big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.
“It’s not an easy path. There are difficult decisions you have to take to get there. But we believe if we’re going to grow the economy, this is going to be an Autumn Statement for growth, then we have to show the country there is a path to a lower tax economy.”
Typically ministers use the September figure for inflation when uprating working-age benefits, which would mean a 6.7% hike.
But the South West Surrey MP has not ruled out using October’s far lower figure of 4.6%.
Asked about the possible move in an interview with the BBC, the Chancellor said: “We will always be a compassionate Conservative government but part of how we make our economy successful is by making sure companies like this company can find the staff they need.
“Nearly a million vacancies across the economy, so we do need to reform our welfare system.”
Sources said a decision on the figures is yet to be made.
Slashing inheritance tax, which would be bound to draw criticism for supporting the wealthy while others struggle with the high cost of living.
Conservative former chancellor Lord Clarke said the move may please MPs on the Tory right who are clamouring for tax cuts, but others would find it “appalling”.
Ministers have already announced a fresh welfare crackdown amid efforts to get people back into work under a toughened sanctions scheme.
Free prescriptions and legal aid will be cut off for benefit claimants who are deemed fit to work and do not seek employment.
There are hopes the final forecasts from the Office for Budget Responsibility will give Mr Hunt more “fiscal headroom” than expected to make tax cuts when he receives them on Friday.
The Chancellor said he wants firms to be the focus of any tax cut he may offer, during a visit to the ITM Power manufacturer in Sheffield.
“In terms of tax cuts you’ll have to wait and see but I will say the priority is helping businesses like this to succeed,” he told the BBC.
The options for cutting inheritance tax – which is charged at 40% on estates of more than £325,000, with an extra £175,000 towards a main residence passed to direct descendants – include reducing it by 50%, 30% or 20%, according to The Times.
The Tories are said to then be considering making abolishing it entirely an election manifesto pledge next year, which could cost £7 billion a year in the short term.
Mr Hunt also ruled out him standing down as an MP after the next general election in his interview with The Telegraph.
When asked if he would be resigning Mr Hunt, who has been selected as the Tory candidate for the new Godalming and Ash constituency, said: “absolutely not”.
He adding he would be “fighting relentlessly” to win his seat in constituency where he has “a big challenge from the Liberal Democrats”.
Meanwhile, Mr Hunt also said he would “love” to see a Tesla factory opened in the UK and has spoken to Elon Musk about the prospect.
“I would love to have a Tesla factory in the UK anytime. Let’s be clear, that is a fantastic company,” the Chancellor told the BBC.
Mr Hunt pointed to £2 billion from a new £4.5 billion fund for manufacturers being earmarked for the automotive industry.
“I spoke to Elon Musk about this and he said it’s not about the support. It’s about the environment and he loves London because there’s so much tech going on and Tesla is essentially a tech company, so let’s see what happens,” he added.
Additional reporting by Press Association.
