Jeremy Hunt will today unveil his Budget which he is expected to use to slash tax for workers.
The Chancellor looks likely to announce a cut in national insurance by a further two percentage points, matching a cut in the autumn statement.
The change could save the average worker £450 a year, adding up to £900 when combined with last year’s move.
Mr Hunt, who is attempting to both revive the British economy and woo voters ahead of the next general election, is widely reported to have opted to bring down national insurance rather than reduce income tax.
Slashing income tax would benefit other groups such as pensioners and is better understood by many voters, but it would be more expensive.
But the Chancellor is under intense pressure from Tory MPs to go further to ease the record-high tax burden with income tax cuts and the unfreezing of tax thresholds.
There are concerns another national insurance reduction will not be enough to boost Prime Minister Rishi Sunak’s poll ratings.
An income tax cut, previously promised by Mr Sunak, could reportedly still feature in a fiscal event later this year or in the Conservative election manifesto.
In comments ahead of his Budget, Mr Hunt said: “Because of the progress we’ve made because we are delivering on the Prime Minister’s economic priorities we can now help families with permanent cuts in taxation.
“We do this not just to give help where it is needed in challenging times. But because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.”
He added that growth “cannot come from unlimited migration”, but “can only come by building a high-wage, high-skill economy”.
He has said he will not pay for tax cuts with borrowing, meaning a combination of spending cuts and tax rises elsewhere will be necessary.
Tax rises could include a levy on vapes, a tax raid on owners of short-term holiday lets, and the scaling back of the non-dom tax regime – a key Labour policy.
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