Budget will focus on economic growth, Hunt says amid reports of more tax cuts

The Budget will be focused “prioritising economic growth”, Jeremy Hunt has said after being questioned about rumours he could cut public sector spending to fund lower taxes.

The Chancellor would not be drawn into confirming suggestions that further tax cuts would be announced at the Spring Budget on March 6.

The move is likely aimed at garnering political favour with voters ahead of the general election expected later this year.

The PA news agency understands the Treasury is considering tax cuts at the next fiscal event, which could be funded by reductions in unprotected public sector spending across different Government departments.

Hints at further lowering of taxes come as official figures revealed Britain fell into recession at the end of last year.

Asked about the reports by Sky News, Mr Hunt said he would not break with convention and speak about the Budget in the weeks preceding it.

But the Chancellor did hint at his preference for tax cuts, suggesting that countries with “lighter taxes” did “tend to grow faster”.

He added: “But I would only cut taxes in a way that was responsible, and I certainly wouldn’t do anything that fuelled inflation just when we are starting to have some success in bringing down inflation.”

Asked if such cuts could come at the expense of cutting public services, the Chancellor pointed to his record of championing extra investment in the NHS while he was health secretary.

He said: “I am a passionate supporter of the NHS and all our public services, but in the long run the best thing that I can do as Chancellor for the NHS is to make sure that our economy is growing healthily.

“So what you will see in everything I do in the Budget on March 6 is prioritising economic growth.”

Rachel Reeves said it was “dangerous” and “misguided” for Mr Hunt to be providing a “running commentary” on his upcoming Budget.

The shadow chancellor said she had made “no secret” of the fact that she would also want taxes on working people to be lower if Labour won power but said she would “never make a promise” if she could not say where the money would come from.

The Labour frontbencher also suggested public services were in need of extra investment, rather than budget cuts.

She said: “I do recognise that our public services are under huge pressure – unlike perhaps the Conservatives do – which is why I said there does need to be an immediate injection of cash into our public services.”

She added: “If our economy had grown at the rate of other OECD (Organisation for Economic Co-operation and Development) countries these last 14 years, our economy would be £150 billion bigger, worth £5,000 for every family in the UK and we would have tens of billions of pounds of additional tax receipts which we would be able to invest in our public services.

“That’s why it’s so important that we grow our economy.”