After official forecasters informed the Treasury it has more money than anticipated, Jeremy Hunt is considering cutting inheritance tax in next week’s autumn statement and lowering taxes for small businesses, after right-wing Tory MPs pressured him to do so. Treasury sources state he may consider cutting this levy charged on assets handed down from parents and grandparents since its introduction in 1965.
Forecasters believe Mr Hunt has more spending flexibility due to lower interest rates, with higher-than-anticipated tax revenues and borrowing costs providing him with additional flexibility for change. Furthermore, savings have been achieved through reduced welfare spending and lessened benefits increases than planned.
The Chancellor will unveil several measures designed to boost growth, including a £400 million fund designed to assist individuals with mental health and muscular-skeletal conditions transition into work as well as tougher sanctions for claimants who do not accept reasonable job offers. He will also unveil investments in business support and training such as creating a centre of manufacturing excellence and 12 investment zones designed to encourage more investment from firms.
He will be under immense pressure to boost wages, lower energy bills and tackle public service deficits. With inflation near its highest level in over two years and predictions of zero economic growth until 2025 from the Bank of England, there will likely be little significant change made immediately but rather used as an opportunity to articulate a strategy for the future.
Rachel Reeves, Labour’s shadow chancellor, will use this event as an opportunity to transform Britain’s economy, accusing the Government of failing to address supply-side concerns that are hindering growth and contributing to job loss as well as increasing deficits.
Laura Kuenssberg stated, ‘The UK requires an ambitious plan for driving economic growth and creating the jobs of tomorrow with clear priorities in place,’ she noted. It must invest in skills training, infrastructure improvements and R&D to give businesses confidence to invest.’ Although not out of danger yet, ‘it is clear that the slowdown was temporary with encouraging signs of recovery arising’ – By Laura Kuenssberg; follow @BBKLAura on Twitter for updates.