JEREMY Hunt has rejected calls from Tory MPs for tax cuts to help boost growth as he insisted cutting inflation must come first.

The Chancellor, a millionaire former businessman, also refused to say if he had ever received a tax penalty like Tory party chair Nadhim Zahawi.

Mr Hunt insisted the public were not interested in his personal affairs, but suggested there was nothing of interest in them.

Speaking at Bloomberg’s London HQ, the Chancellor also insisted Brexit could be the catalyst to a healthier economy and attacked pessimism about the UK as “declinism”.

Opposition parties said the speech would be “cold comfort” for families struggling with a cost-of-living crisis exacerbated by Tory mismanagement of the economy.

In his first speech of the year, Rishi Sunak said halving inflation from 10 to 5 per cent by the end of 2023 was one of his top five priorities as Prime Minister.

Mr Hunt is facing growing calls from Tory MPs to cut taxes, currently at historically high levels, when he delivers his budget in March.

However he said today that the “biggest, quickest tax cut” he and the Prime Minister could give people was “to halve the inflation that is eating away at people's pay." 

With prices driving demands for pay rises and fuelling strikes, he said cutting inflation was also the “only sustainable way to restore industrial harmony” in the country.

He said: “My party understands better than others the importance of low taxes in creating incentives and fostering the animal spirits that spur economic growth.

“Another Conservative insight is that risk-taking by individuals and businesses can only happen when governments provide economic and financial stability.

“So the best tax cut right now is a cut in inflation.”

The Chancellor said he wanted to reverse the attitude of “declinism” in Britain, saying the country’s economy had “grown at about the same rate as Germany” since the EU referendum in 2016. 

He said Brexit should be looked at as an opportunity to “create an economic environment which is more innovation friendly, and more growth focused”.

He said: “Our plan for growth is necessitated, energised and made possible by Brexit.

“The desire to move to a high-wage, high-skill economy is one shared on all sides of that debate. We need to make Brexit a catalyst for the bold choices that will take advantage of the nimbleness and flexibilities that it makes possible.”

He went on: “Declinism about Britain was wrong in the past - and it is wrong today. Some of the gloom is based on statistics that do not reflect the whole picture.

"Like every G7 country, our growth was slower in the years after the financial crisis than the years before it. But since 2010, the UK has grown faster than France, Japan and Italy. Since the Brexit referendum, we have grown at about the same rate as Germany.

"If we look further ahead, the case for declinism becomes weaker still.

“The UK is poised to play a leading role in Europe and across the world in the growth sectors which will define this century."

However the UK economy remains the only one in the G7 which is smaller now than before the Covid pandemic.

Mr Hunt said levelling-up was one of the four “E” pillars against which he would assess growth policies: enterprise, education, employment and everywhere.

He said the Treasury would be identifying investment zone sites that could be turned into “mini-Canary Wharfs”, providing “high-potential but underperforming areas” with tax breaks to attract new investment, with work on identifying the locations starting shortly.

As part of his “employment” pillar, Mr Hunt encouraged those who had left the workforce during the Covid pandemic to return, telling them: “Britain needs you.”

In a Q&A, Mr Hunt twice refused to say if he paid a tax penalty, saying journalists would not find anything “interesting” in his tax affairs and the public were not “remotely interested”.

Mr Zahawi has authorised HM Revenue and Customs to discuss a backdated tax and penalty settlement estimated at £4.8m with an ethics investigation ordered by Mr Sunak.

Mr Zahawi is understood to have struck the deal with HMRC while Chancellor last year.

HMRC boss Jim Harra yesterday told MPs there were “no penalties for innocent errors in your tax affairs”, adding to the pressure on Mr Zahawi to resign as Tory party chair.

Mr Hunt said: “I’m not going to talk about my personal tax affairs, but I don’t think there’s anything you’d find interesting to write about if I can put it that way.”

Pressed again, he again declined to give a straight answer, saying: “By the way, I don’t think people at home are remotely interested in personal tax affairs, they are interested in these things,” gesturing towards the Government’s five priorities.

SNP Economy spokesperson Stewart Hosie MP said: "Neither the Tories, or the pro-Brexit Labour Party, are being honest with voters about the biggest cause of long-term damage to the UK economy and cost of living.

"Brexit has cost the UK billions and hammered trade, growth and household incomes. With Jeremy Hunt and Keir Starmer ruling out any return to the EU or single market - independence is the only way for Scotland to regain our place in Europe and build a stronger, more prosperous economy.

"Westminster has presided over years of failure on wages, living standards, and economic growth. With families struggling, as the cost of living in the UK soars, Scotland needs to become an independent country so we can escape the damage of Brexit and Westminster control for good."

Shadow chancellor Rachel Reeves said: “Thirteen years of Tory economic failure have left living standards and growth on the floor, crashed our economy, and driven up mortgages and bills. The Tories have no plan for now, and no plan for the future. It’s time for a Labour government that will build a better Britain.”

Liberal Democrat Treasury spokeswoman Sarah Olney said: “This Conservative Party sounds like an unfaithful partner asking for yet another chance.

“But after crashing the economy and sending mortgages sky high, why should we trust them again? Jeremy Hunt’s speech is cold comfort for families and pensioners facing unbearable price rises.”