Hunt Unveils £18 Billion in Tax Cuts Despite Economic Headwinds
• Jeremy Hunt unveiled £18bn in tax cuts and fiscal loosening, arguing lower inflation provides space despite higher inflation underlying the new forecasts.
• The centerpiece is making full expensing of business investment permanent, the largest business tax cut in modern British history aimed at raising investment.
• There is also a 2 percentage point cut in employee National Insurance contributions, amounting to a £450 tax cut per median earner, likely an election pre-giveaway.
• The fiscal space comes from deep implied cuts to public services of £19.1 billion that may be unrealistic.
• Even after the tax cuts, slower growth is expected next year, with falling real disposable income and house prices, meaning voters may not feel better off.