Chancellor Jeremy Hunt has hinted at possible tax cuts ahead of this week's Autumn Statment.

In a round of broadcast interviews ahead of Wednesday's tax and spending announcement, the Chancellor said “everything is on the table".

He said the country had now “turned a very big corner” in tackling inflation.

However, he warned that there would need to be “difficult decisions” on benefits and welfare spending.

READ MORE: Hunt eyes up inheritance tax cut as row brews over benefits clampdown

Speaking to Sky News's Trevor Phillips, Mr Hunt said any tax cut would have to be done in a responsible way.

“I won’t do any kind of tax cut that fuels inflation,” he said. But he added: “We need to show there’s a path to a lower tax economy.”

Reports suggest the Chancellor could slash inheritance tax. Currently, the levy is charged at 40% on a person’s estate above the threshold which currently sits at £325,000.

Married couple can share their allowance, meaning parents can pass on £1 million to their children without any tax being paid.

In 2021/22 estimates suggest that the tax was paid on 37,000 estates at death in 2021/22, which represents less than 5% of all deaths, raising £6.1 billion.

Though it affects only a relatively small proportion of the population, polls suggest it is deeply unpopular.

According to reports, the Chancellor is considering reducing the rate from 40% to either 30% or 20%, with a promise to abolish it altogether in the next Tory manifesto.

Mr Hunt is likely to have more fiscal headroom than previously expected thanks to rising tax revenues and falling borrowing costs.

However, he suggested any rabbits in Wednesday's statement would have to be at least partly funded through welfare spending reforms.

He said: “One thing I want to be very clear about: there’s no easy way to reduce the tax burden. What we need to do is take difficult decisions to reform the welfare state and to make public services more productive and more efficient.”

Reports last week suggested the Chancellor could increase benefits by 4.6%, the current rate of inflation, rather than, as expected, September's rate of 6.7%.

While this would save the government £2bn, it would hit an estimated 9m households and cost single mothers an estimated £218 a year.

At the same time, Mr Hunt could look to save more money by changing to the work capability assessment which determines whether a person is fit enough to work or if they should receive disability benefits. 


READ MORE: Scottish Government urges Westminster to back key sector

Later on the same programme, Shadow Chancellor Rachel Reeves said: “Cutting inheritance tax in the middle of a massive cost-of-living crisis and when public services are on their knees is not the right priority.

“I understand people’s desire to pass onto their children what they have worked hard for, but right now that is not the right thing to do and we would not support it.”

The shadow chancellor also rejected Mr Hunt’s argument that he needs to take “difficult decisions” on welfare payments.

The Herald:

Ms Reeves said benefits should rise by the higher figure, adding: “If you pick and choose from year to year which inflation number is the cheapest thing to do, then what you see is the gradual erosion of people’s incomes.”