Spring Budget: No 10 denies Rishi Sunak is Budget ‘backseat driver’ as Prime Minister insists economy ‘on right track’

The Chancellor will deliver the Budget on March 6

Downing Street has insisted Rishi Sunak is not a budget “backseat driver” amid suggestions the Prime Minister viewed the Chancellor as timid and lacking imagination.

The accusation emerged after the Treasury released official pictures of Mr Sunak studying Jeremy Hunt’s laptop as the pair discussed the budget.

Downing Street sources argue the pair just work closely together, and there is no divide on management of the economy.

Prime Minister Rishi Sunak speaks with the Chancellor of the Exchequer Jeremy Hunt in the Chancellors Office.

Monday also saw Mr Sunak insist the economy is “on the right track”, despite Britain heading into a recession.

Asked at a lobby briefing whether Mr Sunak viewed the Chancellor as timid, the Prime Minister’s official spokesman dismissed the reports.

He said: “Absolutely not. The Chancellor is working very closely with the Prime Minister to deliver our plan for the economy and obviously the Chancellor will be setting out further measures in line with that on Wednesday at the Budget.”

It came as Mr Hunt said he wanted to move towards a “lower tax economy” in a hint at a pre-election giveaway to voters in the form of a national insurance or income tax cut.

But in a sign that the measures may not be as bold as some Tories hope, he stressed the need to act in a “responsible” way.

Mr Hunt suggested to reporters that a more efficient public sector could give him greater scope for tax cuts.

The Chancellor said: “We do want to move to a lower taxed economy, but we’re only going to do so in a way that is responsible and recognises that there are things that taxes pay for, that we couldn’t cut taxes by borrowing.

“We’ll do so in a responsible way. But if we can spend money on public services more efficiently then that will mean less pressure on taxpayers.”

Speculation ahead of the Budget has suggested the Chancellor could seek to cut 1p or 2p off income tax or – as a cheaper alternative – national insurance, to ease the burden on working households ahead of the general election later this year.

Ministers are understood to favour cutting income tax, but given the impact on inflation, Mr Hunt is widely expected to instead slash national insurance. This will however create a £9 billion gap in the public purse.

Officials have now drawn up a range of options for raising money to fund the tax cuts, potentially including reforms to the non-dom status for wealthy individuals with earnings overseas.

Scrapping non-dom status has been promised by Labour, with the money committed to measures including NHS improvements, so adopting the policy could lay a trap for Sir Keir Starmer’s party, which would have to find an alternative way to pay for its pledges.

Mr Hunt said: said: “You’ll have to see on Wednesday precisely what I’m going to announce.

“But let me be clear, there is a plan for growth compared to the Labour Party that has just had to abandon the central plan that they had for growth – this £28 billion number that one day they were supporting, the next day they weren’t.”

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Earlier on Monday, Mr Sunak claimed the UK economy is getting “on the right track” as he visited the site of the former Honda car factory.

The Japanese car giant’s plant in Swindon, Wiltshire, shut in 2021 with the loss of thousands of jobs and the site was sold to developer Panattoni to turn into a logistics hub.

Addressing Panattoni staff working on the demolition and reconstruction of the site, the Prime Minister said in the last five years the firm has begun developing more than 25 million square feet of industrial space.

He said: “I think that’s a huge vote of confidence in the UK, and it shows that the work we’re doing to get the economy on the right track is paying off.

“Now, I’m determined, as Prime Minister, to make sure that the UK is the best place in the world to invest and grow a business like this.

“And that’s why we’ve been taking ambitious steps, like making full-expensing permanent, which is the biggest business tax cut in modern British history.

“It’s all about supporting businesses like this to invest in local areas and create jobs and opportunity for the future.”

Elsewhere, the Joseph Rowntree Foundation found more than a fifth of Britons were living in poverty, with dramatic increases in deep poverty and destitution since 2017.

Now Chancellor has been warned by the SNP that Wednesday's budget risks condemning households to a second 'lost decade' for living standards.

Kirsten Oswald MP said: "The warning signs are clear: the UK is heading towards another damaging decade of Westminster austerity cuts unless both the Tories and Labour scrap their economically illiterate fiscal rules.

"The Spring Budget presents an opportunity for the Chancellor to go for growth - rather than cutting off capital investment and taking an axe to public services.

"That is why we're calling for a £15 billion boost to NHS spending, invest at least £28 billion a year in the green energy renewable goldrush, and rejoin the European Union Single Market.

"That is the only credible and viable way to sustainable growth for these isles".

More than 170 councils have urged the Chancellor to provide more money for vulnerable people struggling with the cost of living, warning that withdrawing support could leave communities facing a “cliff-edge” in provision.