Jeremy Hunt could raise revenue on air passenger duty in order to fund tax cuts in this week’s Budget.
The chancellor is considering a number of options that would allow him to commit to billions of pounds of personal tax cuts after recent forecasts from the Office for Budget Responsibility (OBR) gave the chancellor less fiscal headroom than previously thought.
On the list of options is an increase in air passenger duty of business travel, which would amount to a rise in business class air fares.
He is also said to be considering a tax on vapes, an extension of the windfall levy on oil and gas producers, abolishing the non-dom tax loophole and abandoning perks for second homeowners who make money from holiday lets.
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Mr Hunt is paving the way for a mass tax giveaway in Wednesday’s pre-election Budget, with speculation around cuts to income tax or national insurance.
The chancellor will unveil his spring budget on Wednesday
The Treasury is said to be considering cutting 1p or 2p from national insurance or income tax. Mr Hunt told Sky News that his last cut of national insurance in the autumn statement in November was a “turning point” and he hopes “to make some progress on that journey”.
The chancellor is also planning to use the Budget to insist he can make public services more efficient, having announced plans to make the civil service more productive through the use of AI and better data.
Mr Hunt is widely understood to be pursuing tax cuts in the hope of drumming up support for the government, despite recent polling showing that the public do not want to see tax cuts at the expense of public spending.
In a survey by the Fairness Foundation, 64 per cent of voters support keeping taxes as they are or increasing them, while just 16 per cent say they want tax cuts if it means cutting public services.
Jeremy Hunt hinted that he would be looking to cut taxes but insisted it would be in a ‘responsible’ way
On Sunday, Mr Hunt said he had a “moral duty” to put more money back in workers’ pockets, but insisted any tax giveaways would be “responsible”.
Mr Hunt told Sky News: “It’s going to be a prudent and responsible budget for long-term growth.”
Conservative MP Sir John Redwood told TheSunday Telegraph that tax cuts should not be paid for with tax rises and that he “would strongly recommend that they forget all these new taxes and extra taxes and get on with the real job which is lower taxes”.
Mr Hunt’s spokesperson declined to comment.
