This Budget is likely to be Jeremy Hunt’s final fiscal event before the election, and he will aim to give the Conservatives a strong platform heading into polling day.
This means offering voters incentives to stick with the Tories, such as tax cuts and the promise of more to come, while avoiding any controversies that could harm the government’s reputation.
Hunt is expected to announce a further two percentage point cut in National Insurance, building on the 2-point reduction made in the autumn. While cheaper than cutting income tax, National Insurance is not as easily understood or appreciated by voters.
Jeremy Hunt (Credits: The Times)
Some Tory MPs have criticized the move, arguing that repeating a cut that went largely unnoticed in the autumn is not a wise strategy.
Others believe that voters are more concerned about public services than tax cuts, suggesting that the electorate may not be as receptive to the idea of lowering the tax burden as the party thinks.
As the National Insurance cut has already been leaked, it is unlikely to be the headline announcement today, with speculation that Hunt may also announce an income tax cut, possibly reserved for the party’s manifesto.
Another potential announcement could be the abolition of inheritance tax, which would require finding £7 billion from other sources and could be seen as favoring the wealthy.
There are also rumors that Hunt may consider scrapping the non-domiciled tax status, a move that could make it harder for Labour to attack Rishi Sunak’s wealth (his wife Akshata is a non-dom but has chosen to pay UK tax on her overseas income).
