Spring Budget 2024: Jeremy Hunt vows to bring down borrowing and reduce debt as Labour criticise ‘14 years of failure’

Chancellor Jeremy Hunt will deliver the Spring Budget statement after Prime Minister’s Questions on Wednesday

Jeremy Hunt is set to promise “permanent cuts in taxation” as he delivers a “responsible” Spring Budget that is expected to include an extension of the contentious windfall levy on oil and gas companies.

The Chancellor will use today’s Budget to try to win over voters with fiscal responsibility by seeking to bring down borrowing and reduce debt, while also unveiling a 2p cut to national insurance.

Reducing inflation is one of Rishi Sunak’s five priorities, with the key economic measure having more than halved from 11.1 per cent to 4 per cent since October 2022.

Jeremy Hunt will deliver the Spring Budget on Wednesday.

In advance of his address, Labour accused the Conservatives of “14 years of failure”, while the SNP warned the cut to national insurance would mean “cutting public services to the bone”.

The Scotsman also understands Mr Hunt will announce an extension of the windfall tax on oil and gas giants. The move is a blow to the Scottish Tories, whose leader Douglas Ross had urged both the Chancellor and Prime Minister to not extend the tax.

Speaking in the Commons, Mr Hunt will repeat the government’s new slogan about “long-term decisions”, and stress the economy’s struggles, with Britain now in a recession, were down to the financial crisis, a pandemic and the Russian invasion of Ukraine.

Warning about borrowing, he is expected to say: “An economy based on sound money does not pass on its bills to the next generation. When it comes to borrowing, some believe there is a choice between responsibility and compassion. They are wrong.

Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves prepare ahead of Wednesday's spring Budget.

“It is only because we responsibly reduced the deficit by 80 per cent between 2010 and 2019 that we could generously provide £400 billion to help families and businesses in the pandemic.

“The Labour Party opposed our plans to reduce the deficit every step of the way. But at least they were consistent. The Liberal Democrats supported controlling spending in office, but now want to prop up a party after the election that will turn on the spending taps. It’s the difference between Labour with no plan and the Liberal Democrats with no principles. But we say something different.

“With the pandemic behind us, we must once again be responsible and increase our resilience to future shocks. That means bringing down borrowing so we can start to reduce our debt.”

Mr Hunt will also defend the government’s record, and claim it is Labour that will see families face an increase in taxes.

He is expected to say: “Yet despite the most challenging economic headwinds in modern history, under Conservative governments since 2010 growth has been higher than every large European economy – unemployment has halved, absolute poverty has gone down, and there are 800 more people in jobs for every single day we’ve been in office.

“Of course, interest rates remain high as we bring down inflation. But 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.

“But if we want that growth to lead to higher wages and higher living standards for every family in every corner of the country, it cannot come from unlimited migration. It can only come by building a high-wage, high-skill economy. Not just higher GDP, but higher GDP per head.

“And that’s the difference with the Labour Party. They will destroy jobs with 70 new burdens on employers, reduce opportunities by halving new apprenticeships and risk family finances with new spending that pushes up tax”.

The Chancellor is widely reported to have decided to cut national insurance rather than the more expensive option of a 2p reduction in income tax. It come in the face of the worst polling for the Tories since the 1970s.

Downing Street would not be drawn on the prospect of a cut to national insurance, with the Prime Minister’s official spokesman saying: “I’m not going to get drawn on any of the Budget speculation.”

Treasury sources also refused to comment ahead of the Chancellor’s statement on Wednesday. Believed to be worth £450 on average, the cut would come in from April and represents Mr Hunt’s second reduction on national insurance.

The Resolution Foundation think-tank said the combination of another 2p cut on top of the 2p reduction that came into effect in January would be worth up to £1,500 a year for employees. However, Labour labelled the Budget “the final chapter of 14 years of economic failure under the Conservatives that has left Britain worse off”.

Rachel Reeves, Labour’s shadow chancellor, said: “The Conservatives promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down.

“Taxes are rising, prices are still going up in the shops and we have been hit by recession. Nothing the Chancellor says or does can undo the economic vandalism of the Conservatives over the past decade.

“The country needs change, not another failed Budget or the risk of five more years of Conservative chaos.

“Under Keir Starmer’s leadership, the Labour Party has changed and is now the party of economic responsibility. Only Labour has a long-term plan to deliver more jobs, more investment and to make working people better off.”

Elsewhere, the SNP warned "the future of the NHS is at stake" and repeated its calls for the Chancellor to use the available headroom to deliver a £15 billion NHS funding boost.

SNP Westminster leader Stephen Flynn said: "It's increasingly clear the future of the NHS is at stake – and the SNP is the only party standing up for our NHS by demanding the funding it needs.

"The UK government has already slashed Scotland's budget – and now the Tory Chancellor is cutting public services to the bone. It has to stop. The SNP's message to the Chancellor ahead of the UK Budget is clear – don't take the axe to our NHS.

"Instead of imposing cuts, Jeremy Hunt should be investing to improve public services, help families with the cost of living and boost economic growth.

"The SNP is calling on the Chancellor to use the available headroom to deliver a £15bn funding boost for the NHS, and tax the super rich to deliver a £400 annual energy bill discount for households.

"And instead of cutting capital investment, the SNP is challenging the Chancellor to go for growth by investing at least £28bn in the green energy gold rush and re-joining the EU single market.

"The Tories trashed the economy – and neither Rishi Sunak or Keir Starmer have a credible plan. Instead, they are ushering in another decade of austerity cuts with their economically illiterate fiscal rules".