Jeremy Hunt has hinted that further tax cuts could be on the cards following the recent reduction in national insurance.
The Chancellor, who will deliver a spring Budget in March, told the Martin Lewis Money Show Live on Tuesday evening that taxes will not return to pre-pandemic levels in “one go”. However, Mr Hunt did not give any timetable for when further cuts could take place.
“After a period in which taxes have gone up in order to pay for the costs of the pandemic or the £3,500 of help we gave people in the cost of living crisis to a typical family, we now want to bring that tax burden back down,” Mr Hunt told the presenter.
“Now we can’t get all the way back to where we were pre-pandemic in one go, but we can make a start. And this is about £1,000, just under £1,000 for a typical two-earner family. But we would like to go further as and when it’s affordable and responsible to do so.”
It comes after a two percentage point cut in national insurance, from 12% to 10%, took effect last Saturday.
Several economists have pointed to the fact that despite the national insurance cut, many households are still facing the burden of high taxes. Labour also branded the move a “raw deal”.
There is speculation in Westminster that further tax cuts could be announced in the spring budget on 6 March, with a general election expected in the second half of the year. Some Tory MPs are lobbying the Chancellor to push ahead with tax cuts in a bid to woo voters.
In the same interview, Mr Hunt also said that the carer’s allowance of £76.75 a week was never meant to be a replacement for income.
He said: “We keep all the benefits under review. What I would say is the carer’s allowance was never meant to be income replacement. It’s meant to be support for people doing caring duties. But lots of people do caring duties for members of their family and people they know well.
“But I don’t think it’s possible for the state to fully replace income. But we have increased the carer’s allowance and we will continue to keep it under review.”
