UK
Jeremy Hunt set on giving businesses £10bn tax cut in Autumn Statement

TAX CUT FOR THE 1% IS AUSTERITY FOR THE 99%

Ben Riley-Smith
Fri, 10 November 2023 

Jeremy Hunt, the Chancellor, publicly ruled out any tax cut that increases prices for businesses - KIRSTY O'CONNOR/HM TREASURY

Jeremy Hunt is determined to give businesses a £10 billion tax cut by extending “full expensing” at his Autumn Statement this month, The Telegraph understands.

The Chancellor believes the move would help boost long-term economic growth, one of the central aims in the package.

Full expensing allows companies to write off the cost of investments. For every £1 they invest, a firm is able to cut their taxes by up to 25p.


Extending the tax cut scheme by three years – to 2028-29 – would not be inflationary, Treasury officials have concluded, meaning it passes one of Mr Hunt’s key tests.

On Friday, the Chancellor publicly ruled out any tax cut that increases prices, arguing that halving inflation this year remains the Government’s top priority.

But that means major tax cuts for households rather than businesses are being planned for next spring rather than this autumn, so any political boost comes closer to the general election.

The challenge of avoiding recession was underscored on Friday when the Office for National Statistics (ONS) said there was zero economic growth between July and September.

Asked if he was ruling out tax cuts for families, Mr Hunt told Sky News: “I can rule out any tax cut that is going to fuel inflation because that would be the wrong thing to do when we are making such good progress against inflation.

“In the long run, though, what I would say is we do want to bring down the tax burden. There are no shortcuts.

“We’ve got to be smarter about the way we spend taxpayers’ money, we’ve got to reform the welfare system. Those are difficult long-term decisions that the Prime Minister and I are willing to make.”


The message pushed back against a group of vocal Tory MPs who have been calling for sizeable tax cuts this autumn to kick-start the economy and boost the party’s political fortunes.

But it left the door open to tax cuts that would not drive up prices, with the Treasury seeing inflation and affordability as the two critical limiting factors for what they can do.

A third, linked factor is electoral politics, with some Tory strategists fearing a tax giveaway this autumn would have been forgotten by voters if, as expected, the general election is held next autumn.

The Chancellor wants to keep the full expensing scheme in place until 2028-29, The Telegraph understands – the end of the five-year fiscal plan that will be mapped out in the Autumn Statement.

Doing so would cost around £10 billion a year. The final decision is yet to be taken, with new forecasts from the Office for Budget Responsibility still to be handed to the Treasury.

But Mr Hunt is pressing officials to make the numbers work so he can announce an expansion of the full expensing policy on Nov 22, when he delivers the Autumn Statement in the House of Commons.

Gross domestic product (GDP) – which measures the value of goods and services produced – showed no growth in the three months from July to September, the ONS said on Friday.

Some pointed to the impact of successive interest rate rises. Analysts had predicted a 0.2 per cent fall for the quarter, meaning the figure was a little better than expected.

Rachel Reeves, Labour’s shadow chancellor, used the lack of growth to criticise the Tories for their past tax rises, something which is a point of frustration for Conservative MPs.

Ms Reeves said: “The Conservatives now have increased taxes 25 times.

“And that means working people have got less money in their pockets. I would like taxes to be lower, but I will never make a commitment without being able to say where the money comes from.

“That is the mess the Conservatives got us in last year, with their mini-Budget that crashed the economy.”