Jeremy Hunt has said he makes “absolutely no apology” for being responsible with the public finances as he risked angering Tory MPs by playing down the prospect of major tax cuts in Wednesday’s Budget.
The Chancellor has faced pressure from senior Conservatives, including Boris Johnson, for tax cuts in a bid to ignite the UK’s stalling economy, including pausing the planned rise in corporation tax from 19% to 25%.
Speaking on Sunday morning broadcast shows, Mr Hunt said: “Within the bounds of what is responsible, we will always look to reduce the tax burden.”
He said he wants the UK to have “the most competitive business taxes anywhere in the world” but stressed the need for companies to have “the stability that comes from being responsible”.
There is a hard road to follow to get there, but we really can be one of the most prosperous countries— Chancellor Jeremy Hunt
It was put to Mr Hunt, who suggested cutting corporation tax from 25% to 15% during his Tory leadership pitch last year, that he is now running the economy like “Jeremy from accounts”.
He replied: “I think you have to wait and see what I say on Wednesday.
“But, you know, Jeremy the Chancellor will be responsible with public finances and I make absolutely no apology for that.”
Backing Mr Hunt was one of his predecessors at the Treasury, former Tory chancellor Philip Hammond, who said increasing corporation tax is the “right decision for now” and that all businesses need is a signal that the elevated rate is not “some new normal”.
Mr Hunt said there is “no easy fix” for young people struggling in the current economic environment, with home ownership having become more difficult since the Conservatives took power 13 years ago.
Young people want to see “that we have exciting plans to grow the economy”, the Chancellor insisted, adding: “That’s what I’ll be talking about on Wednesday: How are we going to overcome problems so that we can give hope for the future to young people?
“There is a hard road to follow to get there, but we really can be one of the most prosperous countries in Europe, if not the world.”
Mr Hunt has already set out a package of measures to boost workforce participation among the over-50s, the long-term sick and disabled, and benefits claimants.
It includes the axing of the system used to assess eligibility for sickness benefits, paying parents on Universal Credit childcare support upfront and increasing the amount they can claim by several hundred pounds.
Mr Hunt said: “The Brexit decision was a choice – the right choice, in my judgment – to say we shouldn’t fill those vacancies from unlimited migration.
“We need to break down the barriers that stop people here in the UK from working – whether that’s parents who have obstacles because of childcare costs, whether it’s older people who feel they need to retire earlier … whether it’s long-term sick who find there are barriers to working.”
He added that “this is a Budget in which I will be systematically going through all the areas where there are barriers that stop people working who want to”.
The South West Surrey MP conceded that the changes on childcare announced so far will not help parents who are not on Universal Credit.
“We would like to help everyone. It’s expensive to do it. You can’t always do everything at once,” he said.
The Institute for Fiscal Studies welcomed the upfront childcare support and the rise in the cap parents on Universal Credit can claim, though it warned this will not “move the dial on childcare expenses for most low-income families” and benefit only tens of thousands of families – compared with more than 800,000 who are eligible.
Liberal Democrat Treasury spokeswoman Sarah Olney said: “With no commitment to cut energy bills, Jeremy Hunt’s Budget looks set to be more hot air and no real or urgent help for families and pensioners across the nation.”
