Millions set for cash boost in Budget with Jeremy Hunt committed to tax cuts

JEREMY Hunt last night remained committed to Budget tax cuts after better-than-expected economic stats.

Senior government insiders said the Chancellor would dip into around £13billion of headroom for pre-election giveaways.

But they warned they would likely be less generous than the 2p National Insurance cut last autumn.

The Treasury was handed a boost yesterday as official figures showed annual borrowing was £10billion less than previously forecast.

And the January surplus was £16.7billion – the highest on record and more than double the £7.5billion in 2023.

The monthly figures were pushed into the black by the ending of state energy support, lower borrowing costs, and a higher tax take.

Economists did however caution this was less than the £18.7billion that had been forecast by the OBR.

It is understood Mr Hunt has resolved to cut taxes on the March 6 Budget following a growing clamour from MPs and campaigners.

Reducing income tax, national insurance and further fuel duty freezes are all being considered.

Sources said the Chancellor would refrain from splurging the entire £13billion headroom and likely save around half for a buffer in the public purse.

A Treasury figure said: “After delivering the biggest tax cutting fiscal event since 1988 last Autumn, we want to continue lowering taxes to reward work and grow the economy, but only if it’s affordable and responsible to do so.”

Chief Secretary Laura Trott said she would not “speculate” on tax cuts but hinted at them saying the economy had “turned a corner”.

John O’Connell from the TaxPayer’s Alliance said: “While debt remains a growing issue for the public finances, an even greater one is the unprecedented squeeze being exerted on household finances by the vice-like grip of increasing taxation.”