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Jeremy Hunt promises welfare reform to end ‘vicious circle of ever-rising taxes’

Jeremy Hunt has promised to stop the “vicious circle of ever-rising taxes” by reforming public services and the benefits system.

Speaking to The Times on the eve of the Conservative Party conference, the Chancellor claimed he would launch the “biggest transformation of public services in our lifetimes”.

He said Government departments will be told to identify savings by reducing the number of routine tasks carried out by frontline staff such as doctors, teachers and police officers, helped by investment in new technology.

“We need a state that doesn’t just deliver the services it currently delivers, but actually improves the services it delivers and recognises that there’s going to be more calls on those services with an ageing population,” he said.

“But we need to find a formula that doesn’t mean that we’re on a vicious circle of ever-rising taxes.”

It comes as Mr Hunt faces mounting pressure from the Tory right to unveil tax cuts before the general election, amid warnings that the current level of taxation has become “unsustainable”.

More than 30 MPs, including Liz Truss and Dame Priti Patel, have vowed not to vote for any plans that result in higher overall taxes.

Mr Hunt has already effectively ruled out tax cuts in the Autumn Statement, which is due in November, telling LBC earlier this month that it would be “virtually impossible”.

However, he appeared to suggest on Saturday that the Government could unveil a plan to slash taxes before the general election in a bid to secure votes.

Mr Hunt told The Times: “The big question that everyone wants an answer to is are we condemned to taxes going on rising for ever and ever?

“The party that has an answer to that, a credible answer, is likely to win people’s trust at the next election.”

The issue of taxation is likely to prove a major sticking point at the party’s annual conference this weekend, with former prime minister Ms Truss expected to push the Government to do more to grow the economy.

She was among 33 Tory MPs to sign a pledge this week vowing not to “vote for or support any new taxes that increase the overall tax burden”.

Former home secretary Dame Priti said: “State spending is now nearly £1.2tn, with over £1tn being raised in taxes. This level of spending, borrowing and taxation is unsustainable.

“The British people need a tax break – we need to trust people and businesses to keep more of what they earn and spend their money to support themselves and economic growth.”

It comes after a report by the Institute for Fiscal Studies (IFS) published earlier this week found that taxes are set to hit a record-breaking 37 per cent of national income next year, up from 33 per cent when Theresa May left Number 10.

It means the Government will be raising up to £100bn more a year in tax revenue from across the UK, resulting in the average household paying £3,500 more a year in tax on average on top of having to pay for higher mortgage and energy costs.

Prime Minister Rishi Sunak and Boris Johnson have, between them, increased the tax take over the four years they have been in charge of the country more than any other prime minister with Tony Blair the second highest. Only in the aftermath of the two world wars have Government revenues grown by as much as they have now.

Mr Hunt promised the Treasury would ease the burden on households by overhauling the benefits system, as he claimed that 100,000 people a year were moving off work into benefits “without any obligation to look for work”.

He said ministers were considering early treatment for those with mental health conditions to remove “barriers” to work. “We need to make sure we’re doing a better job for people who are finding it difficult to work for whatever reason,” he said.

The Chancellor also called for more positivity about the economy and said people needed to “shrug off a bit of the pessimism”.

“When I started the job there was a lot of doom and gloom about Britain, our prospects,” he said.

“If you look at the fundamentals of the British economy we have had our setbacks like everyone else, we are the fastest-growing large European country, not just since the pandemic but since Brexit, since 2010.

“That’s a period when we’ve had a once-in-a-century pandemic, a global financial crisis that we were particularly exposed to, and a 1970s-style energy shock. Despite all of that the British economy has been very resilient.”

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