Hunt to announce 2p national insurance cut in pre-election Budget

Jeremy Hunt is expected to make a 2p cut to national insurance central to his Budget, which he said would deliver “more opportunity and more prosperity”.

The Chancellor, who has faced pressure from Tory MPs to ease the record-high tax burden, promised “permanent cuts in taxation” that would bring “higher growth” as he seeks to woo voters ahead of this year’s general election.

He looks likely to announce a cut in national insurance by a further two percentage points on Wednesday, matching a cut in the autumn statement.

Conservatives know lower tax means higher growth

Chancellor Jeremy Hunt

The change could save the average worker £450 a year, adding up to £900 when combined with last year’s move.

Mr Hunt was widely reported to have defied calls from some in Downing Street and many Conservative MPs to reduce income tax, which is more expensive but better understood by many voters.

They were concerned another national insurance reduction would not be enough to boost Prime Minister Rishi Sunak’s party’s dire poll ratings, after the last one failed to move the dial.

Mr Hunt was said to have taken the decision after the fiscal watchdog the Office for Budget Responsibility downgraded the amount of fiscal headroom available for delivering tax cuts or spending commitments, within the Chancellor’s self-imposed rule of having debt falling as a share of gross domestic product (GDP) by 2029.

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.