{"id":120855,"date":"2023-11-06T22:19:11","date_gmt":"2023-11-06T22:19:11","guid":{"rendered":"https:\/\/yourclomid.com\/?p=120855"},"modified":"2023-11-06T22:19:11","modified_gmt":"2023-11-06T22:19:11","slug":"jeremy-hunt-must-use-13bn-windfall-to-slash-taxes","status":"publish","type":"post","link":"https:\/\/yourclomid.com\/politics\/jeremy-hunt-must-use-13bn-windfall-to-slash-taxes\/","title":{"rendered":"Jeremy Hunt \u2018must use\u2019 \u00a313bn windfall to slash taxes"},"content":{"rendered":"

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The Chancellor is facing mounting demands to cut taxes as new analysis shows that he has twice as much money to spend as previously expected.<\/p>\n

Jeremy Hunt\u2019s \u201cfiscal headroom\u201d \u2013 the amount he can spend and still hit his target of getting debt falling within five years \u2013 had been estimated to be \u00a36.5billion.<\/p>\n

But using more recent economic data since that official estimate in the spring, the Resolution Foun\u00adda\u00adtion has estimated that the new figure will be around \u00a313billion. It means Mr Hunt has more taxpayer cash to spend on a tax cut between now and the general election.<\/p>\n

He is understood to be considering a \u00a310billion cut in business taxes to help head off recession next year. It could mean an extension of a temporary tax break for firms investing in their businesses.<\/p>\n

The move is being considered for inclusion in this month\u2019s Autumn Statement on the economy, despite Treasury warnings that cuts in personal taxes are unlikely.<\/p>\n

READ MORE <\/strong> Chancellor must unravel awful civil service tax rules and watch UK economy boom<\/strong><\/p>\n

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But Tory backbencher John Red\u00adwood said tax cuts were vital to get the economy firing again. \u201cThe Chancellor needs to break free from the advice that he must not cut taxes this autumn,\u201d he added.<\/p>\n

\u201cHe needs to deliver the Prime Minister\u2019s three economic pledges. Price rises must come down. The economy needs some more growth. The Government needs to cut its new borrowings.<\/p>\n

\u201cThe good news is the right kind of tax cuts would help all three. Failing to cut taxes makes it all more difficult. We need to move on quickly from inflation which is too high and growth which is too slow.\u201d<\/p>\n

He added: \u201cIf you cut some taxes on business and work, you will get more overall revenue. As people and companies generate more income to spend, more goods and services can be made and sold.\u201d<\/p>\n

The Resolution Foundation\u2019s study found high inflation, coupled with record wage growth, is driving up tax revenues much faster than expected, with receipts set to come in double those forecast by the Office for Budget Responsibility.<\/p>\n

But the think tank\u2019s James Smith said: \u201cHigh inflation is flattering the public finances, with higher pay growth feeding through into higher tax revenues.<\/p>\n

\u201cWhile this will give the Chan\u00adcellor the appearance of extra wriggle room, it is in fact a fiscal illusion founded on the idea that higher inflation will increase tax revenues without also pushing up spending on public services.\u201d<\/p>\n