A minister has insisted the UK is seeing “economic better times coming up” and the spring Budget will reflect that, amid warnings of real-terms cuts to NHS funding in the coming financial year.
During interviews with broadcasters on Tuesday, Greg Hands denied public services have suffered under the Tory government and suggested the upcoming fiscal announcement will strike a balance between spending and delivering tax cuts.
It comes as the Institute for Fiscal Studies (IFS) said an already-strained health service could endure a cut worth £2 billion in day-to-day spending in England – the largest reduction since the 1970s.
Appearing on ITV’s Good Morning Britain, trade minister Mr Hands said: “I think we are seeing economic better times coming up and I think the Budget will reflect that.”
When it was put to him that many people would say public services have suffered under the Government, he said: “Well, I disagree. And I think the evidence, actually, is there. We have record numbers of police officers, we pledged in 2019 to recruit an extra 20,000… we have a record number of nurses.
“Obviously there are vacancies, we want to fill those, but look at what we have delivered so far.”
A responsible budget would involve giving people “a bit of a tax break this year” and “still keeping a record amount of funding into public services”, he told Sky News.
Chancellor Jeremy Hunt has signalled he wants 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.
He is expected to announce an extension the current 5p cut in fuel duty for another year and avoid an inflation-linked rise in the levy, in a move that will cost the Treasury around £5 billion.
Mr Hunt has been clear that he will not pay for tax cuts with borrowing, meaning a combination of spending cuts and tax rises elsewhere will be necessary for him to keep to his own fiscal rules on debt.
There has been speculation he could shave more off his post-election public spending plans, reducing overall departmental spending – currently pencilled in to rise by 1% per year in real terms after 2025 – to 0.7%.
But experts have already cast doubt on the whether the existing plans are realistic, as they would involve significant cuts to under-pressure unprotected services such as the courts, police and local authorities.
The policy is a key plank of Labour’s plans and adopting it could lay a trap for Sir Keir Starmer’s party, which would have to find an alternative way to pay for pledges including NHS improvements.
Shadow chancellor Rachel Reeves criticised the Tories for “pickpocketing the Labour Party of its policies”.
Other rumoured rises include a new levy on vapes and removing tax breaks for second-home owners who rent out their properties to tourists.
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 and set dividing lines with Labour ahead of the general election later this year.
Mr Hunt on Monday indicated a more efficient public sector could give him greater scope for tax cuts.
The IFS urged him to deliver more top-up spending for the NHS in Wednesday’s announcement, rather than hold back extra money until later in the year as he has done previously.
Shadow paymaster general Jonathan Ashworth said a “prudent” Budget would “put living standards first and it’s got to look at public services”.
He pointed to a tax burden reaching record levels and expected to rise to its highest point since the Second World War.
“People are worse off under the Tories because of 25 tax (rises), which means working families are something like £1,200 worse off,” he told Sky News.
“I don’t actually think the British public will believe Rishi Sunak and Jeremy Hunt when they know Rishi Sunak has a record of whacking up tax on working people… Let’s see if they actually wipe out the 25 tax rises.”