Jeremy Hunt urged to deliver pre-election tax cuts as government borrowing £11bn less than forecast
CHANCELLOR Jeremy Hunt was last night urged to deliver pre-election tax cuts as figures showed government borrowing was £11billion less than forecast.
Pay rises boosted the tax take and helped see the public deficit for April to July drop from £68billion to £56.6billion.
Ex-Cabinet Minister David Jones said: “It’s time to give people a bit more financial freedom. The tax burden for both businesses and individuals must be lowered.”
Julian Jessop at the Institute of Economic Affairs said: “The best way to fix the public finances is to grow the economy, and tax cuts could still be part of the solution.”
John O’Connell, of the TaxPayers’ Alliance, added the figures “give the Government an opportunity to get serious about economic growth.
Families and businesses are struggling with falling living standards and a 70-year high tax burden, and they need to know that there is light at the end of the tunnel.”
READ MORE ON TAXES
However, the UK is still carrying £2.58trillion of debt — or 98.5 per cent of the country’s entire economic output — while soaring interest on government bonds has pushed up costs further.
And Mr Hunt was quick to play down the chances of tax cuts, stressing that the war on inflation and bringing down debt remained his priority.
He said: “It’s vital that we don’t alter our course and continue to act responsibly with the public finances.
"Only by sticking to our plan will we halve inflation, grow the economy and reduce debt.”
Most read in Money
Ruth Gregory, of Capital Economics, also warned that if the economy weakens later this year, higher unemployment will weaken tax receipts and dent Treasury income.