Jeremy Hunt has declined to give a “cast-iron guarantee” of tax cuts, while insisting the tax burden would go down under a future Conservative government.
He also claimed Labour’s economic plans would lead to tax rises and accused the Opposition of attempting to scare pensioners with lies about national insurance.
Following a speech in London in which he sought to draw dividing lines between the two main political parties ahead of the coming general election, the Chancellor was asked if he could guarantee taxes will fall.
He said: “If you’re saying can I look into a crystal ball and predict what is going to happen in the world in the next five or 10 years, and therefore give you a cast-iron guarantee of when we will be able to reduce the tax burden and to what level, the answer is of course I can’t, and it would be irresponsible to do so.”
He would also not be drawn into revealing whether the Government would raise income tax thresholds, which have dragged more people into paying higher taxes as a result of being frozen since April 2021.
“I can’t today tell you what will be in the Conservative manifesto for the next parliament. But what I can do is make a very clear argument that we will bring down taxes, and I can do so with credibility because that is already what we have been doing,” he said.
But Mr Hunt signalled a desire to cut taxes further in the autumn, following the 2p cut to national insurance at the spring budget, and to scrap national insurance altogether in the future.
“If we can afford to go further responsibly to reduce the double tax on work this autumn that is what I will do,” he said.
“Because over time we make no apology for wanting to keep cutting the double tax on work until it is gone, but only when we can do so without increasing borrowing and without cutting funding for public services or pensions.”
Standing in front of a banner which read “Labour’s Tax rises”, the Chancellor also hit out at the Opposition’s claims that scrapping national insurance would mean a £46 billion funding gap, and lead to higher taxes on pensioners, telling the audience: “Frankly it is a lie.”
He added: “I don’t make any bones about it. It is fake news and it is an absolute disgrace to try and win this election by scaring pensioners about a policy that is not true.”
Treasury analysis carried out by non-partisan civil servants but based on assumptions provided by political special advisers suggest Labour would have a £38.5 billion gap in its spending promises.
On Thursday, Labour leader Sir Keir Starmer set out his “first steps” for Government, which included pledges to invest in the NHS, education, the police, and to set up a publicly owned energy company.
The Chancellor pointed to the Treasury analysis as evidence Labour would need to raise taxes to fulfil its promises if it wins power at the election.
He also attributed falling living standards to the economic shocks of the pandemic and the energy crisis, adding: “To point out, as the Labour Party do, that living standards have fallen this Parliament without mentioning the pandemic or the energy crisis is taking everyone for fools.”
While Mr Hunt conceded the Tories had been responsible for tax raises during their time in power, he insisted the party had cut them again when possible.
A Labour spokesperson said the speech was “another desperate attempt by the Tories to deflect from their £46 billion unfunded tax plan that could lead to higher borrowing, higher taxes on pensioners or the end of the state pension as we know it”.
They added: “All of Labour’s policies are fully costed and fully funded. Unlike the Conservatives who crashed the economy, Labour will never play fast and loose with the public finances.
“Jeremy Hunt would be better spent getting Rishi Sunak to confirm the date of the election, rather than putting out any more of these dodgy dossiers.”
The Liberal Democrats meanwhile said the Chancellor owes an apology to Britons who have been dragged into higher tax bands, claiming some 6.5 million people had faced higher taxes as a result.
Lib Dem Treasury spokesperson Sarah Olney said: “The Conservative party is trying to take the British public for fools with this shameless attempt to erase Liz Truss’s botched budget and their unfair tax hikes.”
