According to an FT report, Hunt said on Thursday (18 January) that although he does not yet have the economic and fiscal projections necessary to shape his March Budget, he argued economies with lower taxes are “more dynamic and more competitive”. 

The chancellor added that whether the government will also deliver an Autumn Statement or not this year will depend on the timing of the general election set by Prime Minister Rishi Sunak. 

According to the FT, one senior government figure scheduling an Autumn Statement between the upcoming Conservative party conference and a November election would allow the party to highlight tax reductions in three consecutive fiscal events.

Autumn Statement 23: Chancellor Hunt promises 110 measures to grow UK economy

“We look around the world and we notice that the economies that are growing faster than us — North America, Asian economies — tend to have lower taxes,” Hunt told reporters during the World Economic Forum in Davos. 

“So that is the direction of travel we would like to go in, but it is too early to know the extent to which we will be able to do it.”  

In his latest Autumn Statement, Hunt announced significant business tax cuts, aiming to unlock £20bn in additional business investment every year.

The chancellor also cut National Insurance by two percentage points – from 12% to 10% – helping 27 million working people.

Hunt is reportedly under intense pressure from his own party to offer pre-election giveaways as the Conservatives aim to reduce the 20-point lead Labour currently holds in opinion polls.

When asked whether reducing taxes amid the UK’s increasing underlying debt-to-GDP ratio would be fiscally responsible, he said this will depend on how the cuts will be funded. 

Autumn Statement 23: Jeremy Hunt cuts NI for 27 million people

“If you fund them by significantly increasing borrowing, then you are just sending the bill to future generations,” he said. “But if it is because of the inherent growth of the economy and you can still see debt falling over the five-year period, then it can be very pro-growth.”

Tom Selby, director of public policy at AJ Bell, said cuts to individual taxes such as income tax or inheritance tax could be among those considered, as well as cuts to business taxes to boost the economy.

Which of these are going to be cut, and to what extent, will depend on the fiscal headroom the chancellor has available come 6 March, he added.