Tory Latest: Hunt Says UK Has No Fiscal Headroom for Tax Cuts

Chancellor of the Exchequer Jeremy Hunt told Bloomberg TV the UK has no fiscal headroom for tax cuts and that reducing the burden on Britons now would be inflationary.

(Bloomberg) — Chancellor of the Exchequer Jeremy Hunt told Bloomberg TV the UK has no fiscal headroom for tax cuts and that reducing the burden on Britons now would be inflationary.

Hunt is the headline speaker at the Tory party conference in Manchester on Monday, and is due to promise to raise the national living wage, while reviewing sanctions on benefits claimants to push more people into work.

But Conservative colleagues want bolder moves before voters go to the polls, including cutting the highest tax burden since World War II. Hunt also told Bloomberg no decision has been made on whether the flagship HS2 high-speed rail link would be built to Manchester.

Read More: UK’s Hunt to Offer Wage Boost for Lowest-Paid Amid Tax Cut Calls

Key Developments, Stories:

  • Senior Tories including Truss, Patel say taxes should come down
  • Hunt vows to raise national living wage to at least £11/hour
  • Stride to promise crackdown on child support payments
  • Donelan says UK should lead on AI safety
  • Sunak Faces Cabinet Split on Taking UK Out of Human Rights Pact
  • After a Year as PM, We Get the ‘Real Rishi’: Adrian Wooldridge

(All times UK)

Donelan: UK Should Lead on AI Safety (9.20 a.m.)

The UK wants to lead on artificial intelligence safety in order to “grip the risks” that the technology presents, Science and Technology Secretary Michelle Donelan told a panel at Conservative Party conference.

Donelan said she wants to ensure the UK is “regulating to innovate” in order to provide clarity and certainty to industry so they don’t have to answer to various different regulators. It comes ahead of a global AI summit that Donelan and Prime Minister Rishi Sunak will host next month, which aims to bring together heads of state and business leaders to help shape AI regulation.

“The rate at which its developing is like nothing we’ve ever seen before,” Donelan said. “That will offer incredible opportunities for mankind but also presents big risks.”

Hunt Wants More Pension Investment in Growth Firms (8 a.m.)

Asked on Bloomberg TV about the potential for a government-backed growth fund, Chancellor of the Exchequer Jeremy Hunt said he wants more pension pots to invest in start-ups and tech firms.

“We want to make it easier for big pension funds to invest in growth companies,” he said. Britain has the largest technology sector outside China and the US and the aim is to maintain that position, he added.

Bloomberg reported over the weekend the UK government is considering copying the Canada Growth Fund to help channel investment into green technology and fast-growing businesses in a bid to boost the economy.

Read More: UK Considers Copy of Canada’s Growth Fund to Boost Investment

Stride to Target ‘Deadbeat Dads’ Over Child Support (8 a.m.)

Work and Pensions Secretary Mel Stride will announce a crackdown on “deadbeat dads” who refuse to pay child maintenance as part of a package of welfare reforms designed to encourage more people to work.

In his speech later on Monday, Stride will set out a series of policies to force parents to pay maintenance payments to their children more quickly.

Chancellor of the Exchequer Jeremy Hunt’s fiscal statement next month is expected to focus on welfare reforms, with the government determined to hit an internal target of getting 1 million people back to work. Stride has already announced welfare changes that would make it harder for working-age Britons with “limited capability” for work to get disability benefits.

Hunt: No Fiscal Headroom For Tax Cuts (7:55 a.m.)

Chancellor Jeremy Hunt said the public finances don’t currently allow for tax cuts and he’s waiting for new figures from Britain’s spending watchdog.

“There’s no fiscal headroom,” Hunt said in a Bloomberg TV interview in Manchester. Hunt also said the government is “turning the tide” on inflation and doesn’t want to undermine those efforts through tax cuts that would increase spending in the economy.

Hunt: Debt Payments Limit Space for Tax Cuts (7:40 a.m.)

Chancellor of the Exchequer Jeremy Hunt said Britain’s debt interest bill has risen markedly since his spring budget due to higher interest rates, and those costs limit his space for tax cuts.

“Our debt interest payments as a country have gone up dramatically,” Hunt told BBC TV on Monday. “I don’t know what’s going to happen in the spring or next year.”

Hunt Ducks Questions on Future of HS2 Rail (7:35 a.m.)

Another key topic at the Tory conference in Manchester is whether the government is preparing to scrap the planned northern leg of the flagship HS2 high-speed rail project to the city from Birmingham.

Chancellor of the Exchequer Jeremy Hunt batted away questions on the future of the UK’s HS2 rail project on Sky News, saying an announcement will be made at the “appropriate time.” But he also said that costs for the project are ten times higher than building high speed rail in France.

He later told the BBC he took a British Airways flight from London to Manchester for the conference, because his scheduled train was canceled due to strikes. 

Read More; Sunak Refuses to Commit to UK HS2 Rail Project as Costs Rise

Hunt: Don’t Know If Pre-Election Tax Cuts Possible (7:15 a.m.)

Chancellor of the Exchequer Jeremy Hunt said he couldn’t guarantee he’d be able to cut taxes before the next general election, even as a clamor grows within his Conservative Party to do so.

“We don’t know whether that’s going to be possible,” Hunt said on Times Radio on Monday. He said tax cuts now would be inflationary and undermine the government’s efforts to curb rising prices.

Hunt also said he doesn’t plan to run again to be Tory leader, saying “I’m completely cured of that.”

Hunt Vows to Raise UK’s National Living Wage (Earlier)

Chancellor of the Exchequer Jeremy Hunt will pledge to raise wages for the UK’s lowest-paid workers in his speech to the conference on Monday.

The UK will increase the national living wage to at least £11 ($13.42) an hour from £10.42, Hunt is due to say on Monday at the Tory Party conference, according to an e-mailed statement. That will increase annual earnings for full-time workers by at least £1,000.

At the same time, the government will crack down on welfare claimants with a review of the sanctions regime in order to encourage more people to return to work. “Those who won’t even look for work do not deserve the same benefits as people trying hard to do the right thing,” the chancellor is due to say. (Joe Mayes)

Badenoch Says Sunak Was “Brave” to Retreat on Net Zero (Earlier)

Business Secretary Kemi Badenoch will call Rishi Sunak “brave” for “shattering a lazy consensus about the costs of net zero” after the prime minister last month pushed back deadlines for ending the sale of petrol-fueled vehicles and eased the push to replace gas boilers in homes.

Badenoch, hotly tipped to put herself forward for the Party leadership a second time if Sunak loses the next election, will hail Sunak’s ability to not “dance to the tune of the metropolitan bubble on energy policy” in her speech to the conference on Monday.

She will also dismiss economic models that demonstrate the negative impact Brexit has had on the economy. ”I’m here to set the record straight,” she will say. “They tell you Brexit is costing Britain 4% of GDP per year. WRONG.” The 4% figure stems from analysis by the government’s own fiscal adviser, the Office for Budget Responsibility.

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