© Reuters. FILE PHOTO: Chancellor of the Exchequer Jeremy Hunt, arrives at BBC Broadcasting House, ahead of his appearance on Sunday with Laura Kuenssberg, in London, Britain, September 3, 2023. REUTERS/Hollie Adams/File Photo
LONDON (Reuters) – British finance minister Jeremy Hunt is considering cutting income tax or national insurance for lower and middle earners in his budget update next week, the Sunday Times newspaper reported, citing sources.
Hunt and Prime Minister Rishi Sunak might in addition delay a widely-expected reduction in inheritance tax, in light of criticism that it would effectively transfer large sums to the richest in British society, the newspaper said.
Hunt is due to present his Autumn Statement on Nov. 22, hoping to revive the fortunes of both a stagnant British economy and the governing Conservative Party ahead of an election expected next year.
His options are limited after heavy state spending on the coronavirus pandemic and last year’s surge in energy prices. Public debt now stands at close to 100% of economic output, more than three times its size 20 years ago.
Still, official forecasts due next Wednesday are expected to show Hunt has more room for giveaways before running into trouble with fiscal rules than in his annual budget published in March.
Hunt, who on Saturday warned of tough choices on welfare spending, is widely expected extend existing incentives for corporate investment.
The Sunday Times said “a number of options” were on the table for cutting income tax or national insurance. Raising the income thresholds at which people pay tax – frozen in recent years despite surging inflation – is also being considered.
The finance ministry is also discussing moving the reference month for linking benefits against consumer prices to October – which saw a sharp fall in the growth rate of consumer prices – from September, the newspaper reported.
