Jeremy Hunt plays down prospect of tax cuts after Britain’s debt rockets to £16billion
JEREMY Hunt is staring into a £16billion blackhole after interest payments on Britain’s debt rocketed.
The Chancellor is now playing down the prospects of tax cuts as he tries to balance the books.
He had been eyeing up £6billion of headroom for giveaways in next month’s Autumn Statement, according to Treasury insiders.
But fears that interest rates will stay high for months have sent the cost of borrowing soaring since March’s Budget.
Mr Hunt now needs to find an additional £23billion to meet interest payments.
The UK had been forecast to spend about £110billion — a tenth of its total revenue — on servicing debts in 2023.
The blackhole renders any hope for tax cuts this autumn unaffordable, with No11 now scrambling to find savings.
Speaking to the Centre for Policy Studies fringe at the Tory party conference in Manchester and with his spending review in just six weeks, he called talking about tax cuts “slightly academic”.
He said: “We are halfway through our battle with inflation but also because debt interest payments have gone up so much in the last six months I don’t think we will be in a position to do that.” It comes as consultants and junior doctors are in the middle of a second set of coordinated of strikes lasting three days.
Mr Hunt said: “We are sticking with the overriding importance of bringing down inflation because it’s not helping any doctors or nurses to give them a pay rise, which then gets eaten away because inflation is higher next year.
“It doesn’t just harm them, it harms absolutely everyone and that’s why it’s so important we tackle inflation.”