Cash-strapped Britain set to cut taxes for workers as election looms

UK finance minister Jeremy Hunt is poised to announce a tax cut for workers Wednesday when he unveils what is likely to be the government’s last budget before a general election later this year.

UK finance minister Jeremy Hunt is poised to announce a tax cut for workers Wednesday when he unveils what is likely to be the government’s last budget before a general election later this year. A cut to national insurance — a levy paid by people who work — costing around £10 billion ($12.7 billion) is likely, according to multiple UK media reports. But soaring government debt, crumbling public services and a lackluster economy leave the chancellor with very little room for further substantial giveaways. The UK economy barely grew in 2023, slipping into recession at the end of the year in stark contrast with Prime Minister Rishi Sunak’s pledge to generate economic growth. In 2024, the Bank of England sees output expanding just 0.25%. Despite that gloomy backdrop, Hunt is expected to deliver an upbeat assessment of Britain’s economic prospects. “We can now help families with permanent cuts in taxation,” he is due to say, according to a statement from the Treasury. “Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.” Hunt’s Conservative Party is trailing the opposition Labour Party with a wide margin in opinion polls, giving him every reason to unveil tax cuts, however small, in a last-ditch bid to win voters.