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A top economic expert has cast doubt on Jeremy Hunt’s plan for tax cuts in the Budget.
The chancellor wants to reduce the tax burden for voters in the run-up to the general election.
But Paul Johnson, director of the highly-respected Institute for Fiscal Studies, said the state of Britain’s public services meant Hunt will have little, if any, spare cash for giveaways.
His comments came after the chancellor told ITV’s Peston programme that he will probably have less money than he had hoped for tax cuts in next month’s Budget.
Hunt said: “As things stand at the moment, things can change, it doesn’t look like I’ll have the kind of room that I had for those very big tax cuts in the Autumn.”
On BBC Radio 4′s Today programme, Johnson said tax cuts would be “very difficult to do without having some really significant effects on the quality of public services”.
“We know that prisons are full, the justice system has massive backlogs in it, social care is struggling, that local authorities are going bust, that we’ve got very high waiting lists in the NHS and so on and so on,” he said.
“In that context it’s clearly going to be really hard to squeeze down again on public service spending.”
He added: “These tax cuts don’t pay for themselves. Nothing that I can think of that he might be considering – whether it be income tax or national insurance, for example – would pay for itself, and therefore that does leave less money, not more, for some of these public spending priorities that he’s probably thinking about.”
The International Monetary Fund has also warned Hunt against choosing to cut taxes over increased public spending.
Opinion polls have also shown that the public would rather any spare money the chancellor has be spent on improving public services rather than cutting tax.
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