Jeremy Hunt clashes with Trevor Phillips
Jeremy Hunt will crackdown on “woke” local council jobs as he targets wasteful public spending in tomorrow’s budget.
The Chancellor insisted he will cut taxes in a “responsible way” and vowed to ease pressure on taxpayers by making sure their cash is spent “more efficiently”.
Local councils will be told they must produce plans by July showing how they will reduce unnecessary spending on discredited equality, diversity and inclusion initiatives, the Daily Express understands.
Mr Hunt said: “We do want to move to a lower taxed economy, but we’re only going to do so in a way that is responsible and recognises that there are things that taxes pay for that we couldn’t cut taxes by borrowing.
“We’ll do so in a responsible way. But if we can spend money on public services more efficiently then that will mean less pressure on taxpayers.”
Chancellor Jeremy Hunt puts final touches to his Budget (Image: Getty)
Mr Hunt is expected to continue the 5p a litre cut on fuel duty in his election year budget.
The Chancellor is also likely to scale back or abolish the non-dom tax status that allows foreign nationals who live in the UK, but are officially domiciled overseas, to avoid paying UK tax on their overseas income or capital gains.
Labour has committed to scrapping it if the party wins the general election and has allocated the cash it would generate to funding some of its policies.
Around £1.6bn would go to the NHS improvements and the rest on primary school breakfast clubs.
It would leave Sir Keir with a decision over whether to ditch the spending plans or reverse any tax cuts introduced tomorrow to cover the cost.
Asked if he will scrap the status, Mr Hunt said: “You’ll have to see on Wednesday precisely what I’m going to announce.
“But let me be clear, there is a plan for growth compared to the Labour Party that has just had to abandon the central plan that they had for growth – this 28 billion number that one day they were supporting, the next day they weren’t.”
The Prime Minister and Chancellor want to deliver tax cuts ahead of the general election (Image: Getty)
The Institute for Fiscal Studies warned there was a “great deal of uncertainty” about how much scrapping the status would generate in extra revenues as it could has unforeseen consequences.
Stuart Adam, a Senior Economist at the IFS and an author of the report, said the current system is “complex, inequitable and creates some perverse incentives”.
He added: “But ‘scrapping non-dom rules’ could mean many things in practice. Simply abolishing any distinction between the taxation of permanent residents and people who have recently arrived here would arguably be unfair to those coming and would make the UK a less attractive location.
“Government needs to tread carefully, not least because the 37,000 non-doms who currently claim tax exemptions on their offshore income and capital gains nevertheless collectively pay around £6 billion a year in UK income tax, National Insurance contributions and capital gains tax – an average of around £170,000 each.
“It might be possible to raise a couple of billion pounds more from non-doms, but there is a great deal of uncertainty and much depends on the detail.
“The more ambitious tax-raising reforms are, the greater the potential revenue yield – but also the greater the risk that the UK would attract fewer non-doms and lose the tax revenue they bring in.”
No 10 deny Rishi Sunak has been a ‘backstreet driver’ on the budet (Image: Getty)
Mr Hunt has been spending the past few weeks looking for cash to fund a significant cut to personal taxes.
He has looked at new levies in other areas after public spending forecasts were less favourable than previously expected.
Vape users and second-home owners who rent out their properties to tourists are among those likely to lose out in the statement.
Mr Hunt continues to face pressure from Conservatives to cut some other taxes, including stamp duty on properties and VAT on purchases by tourists.
Overall departmental spending is currently pencilled in to rise by 1% per year in real terms after 2025, and the Chancellor could reduce this to 0.7%.
Unprotected services such as the courts, police and local authorities would be likely to take the brunt of any reduction.
Few measures have been confirmed so far, with most formal announcements being saved for Wednesday, but the Chancellor has already set out some spending commitments.
On Monday, he announced a £360 million investment in advanced manufacturing projects across the life sciences, automotive and aerospace sectors.
The Treasury has also announced a package of £800 million intended to boost productivity in the public sector, including introducing artificial intelligence into parts of the justice system, digitising more services and expanding child social care places.
The investment is expected to return £1.8 billion to the Treasury by 2029.
Mr Hunt has also announced changes to pension regulations, including a requirement for funds to declare how much they invest in UK companies, in order to “focus minds” and boost investment in British businesses.
Chancellor Jeremy Hunt said: “If we can spend money on public services more efficiently then that will mean less pressure on taxpayers.”
Polling by Ispos found Labour are seen as having the best policies on managing the economy by a margin of 31% to the Conservative score of 23%.
On taxation, Labour were viewed positively over the Conservatives by a margin of 32% to 19%.
Downing Street denied that Rishi Sunak, a former chancellor, has been a “backstreet driver” on the budget.
The Prime Minister’s spokesman said: “Absolutely not. The Chancellor is working very closely with the Prime Minister to deliver our plan for the economy and obviously the Chancellor will be setting out further measures in line with that on Wednesday at the Budget.”
