London: British Treasury chief Jeremy Hunt sought Wednesday to bolster spirits within his Conservative Party with another tax cut for 27 million working people, hoping it can turn the political tide ahead of a general election this year.
But with the tax cut trailed in advance and no major surprises in Hunt’s economic statement to Parliament, speculation that the government planned to use the budget as a springboard for a May election appeared to have diminished.
Even though the British economy has hit one definition of recession and public finances will remain stretched over coming years, Hunt had come under pressure from his Conservative peers to cut taxes.
And he did, with a reduction in national insurance, which workers pay to qualify for a state pension, by 2 percentage points, to 8%. He also hinted at its eventual abolition.
Hunt cut this tax on wages by the same amount in November, meaning that in combination, workers with average earnings will benefit to the tune of around $1,270 a year.
“We will continue to cut national insurance contributions as we have done today so we truly make work pay,” Hunt said in a packed and often rowdy House of Commons chamber.
Labour leader Keir Starmer challenged Prime Minister Rishi Sunak to call an election for May 2, while describing the budget statement as the “last desperate act of a party that has failed.”
