Under pressure: Jeremy Hunt wants to focus on policies that will get the economy moving
Chancellor Jeremy Hunt is preparing to set out plans to reboot growth and wrest back control of the economic agenda.
Hunt will outline some of his ideas ahead of the Budget on March 15. It comes as UK households and businesses face a bleak New Year with the Tories trailing in the polls.
The Chancellor has stabilised markets and staved off the crisis caused by Kwasi Kwarteng’s mini-Budget. But Hunt’s firefighting autumn statement left little optimism for voters – or Tory MPs – to cling to.
More misery was piled on taxpayers, with the tax burden on course to hit its highest level since the Second World War. Businesses are also being hit as corporation tax is hiked from 19 per cent to 25 per cent from April.
It all comes as strikes paralyse much of daily life. Despite these woes, a poll of businesses by the Institute of Directors (IoD) reveals that their confidence in the economy, while still low, is pointing upwards.
Now, the Chancellor wants to focus on policies that will get the economy moving. He is understood to believe that the recession will be shallower than forecast and gave a taste of his thinking in some largely overlooked parts of his autumn statement speech.
That included a pledge to change EU regulation in five growth industries – digital technology, life sciences, green industries, financial services and advanced manufacturing.
The Chancellor’s Edinburgh Reforms loosened constraints on the City. Potentially as significant was Hunt’s nod to Rishi Sunak’s Mais lecture in February 2022. That lecture set out the then-chancellor’s aim to cut taxes on business investments to boost money being ploughed into the economy by private companies and raise productivity.
It could revive hopes that a so-called ‘super-deduction’, due to expire in March, will be extended. The policy gives big tax breaks to companies that invest in new infrastructure, factory and machinery assets.
Meanwhile, a business confidence index published by the IoD edged up to -58 last month from -64. Kitty Ussher, chief economist at the IoD, said: ‘It is hugely encouraging that the investment plans of IoD members are a little stronger in December than at any time in the last six months.’
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