Jeremy Hunt is set to deliver a crucial Budget for the Tory party on Wednesday next week as they languish behind Labour in the polls just months before a general election must be called.
The pressure will be on Mr Hunt to deal with a spluttering economy that has entered a recession and help alleviate pressures from the cost of living crisis that continues to engulf the country.
Senior Tories have been strongly hinting that the chancellor could give the green light to tax cuts, either to national insurance or income tax, to try and woo voters back.
The Independent has taken a look at what we can expect from the Spring Budget.
When is the Budget?
Mr Hunt will step up to the dispatch box on 6 March and deliver his second Budget. It is likely to be the last major fiscal event before a general election that is likely to take place later this year.
The announcement will be in the House of Commons and usually comes at around 12.30pm.
Will Jeremy Hunt look to cut taxes?
There have been some strong hints about what direction Mr Hunt would like to go in, considering an election is just around the corner.
In the autumn statement last year, Mr Hunt cut national insurance and further tax cuts are likely again this time around.
He admitted as much in an interview in early February, telling the BBC’s Political Thinking podcast that his long-term goal was to “lighten the tax burden” for people.
The Financial Times reported earlier this month that the suggested the tax cuts could come at the expense of unprotected areas of spending across government departments.
However, as is usual ahead of a budget, Mr Hunt has refused to confirm if tax cuts will be announced. But he say his plans would focus on economic growth.
Despite this he 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.”
In a further report in The Sun, the newspaper said that the chancellor was looking at a possible 1 per cent cut in National Insurance and could even go further.
Any possible planned tax cuts could be smaller than Mr Hunt would like after Office for National Statistics figures showed a smaller-than-expected surplus in January.
The ONS said there was a public sector net borrowing surplus of £16.7 billion last month, more than double the £7.5 billion surplus seen a year ago and the largest surplus since monthly records began in 1993.
But it was lower than the £18.5 billion surplus pencilled in by most economists.
What else could we see in the Budget?
Another scheme Mr Hunt is reportedly looking at is a “vaping products levy” which would be imposed on imports and manufacturers of vapes to try and make them unaffordable to children.
As reported by The Sun, the duty would apply to the liquid in vapes, with an additional higher tax for any products that contained more nicotine.
In addition there is likely to be a one-off tax on tobacco duty that will raise £500million for Treasury, the newspaper added.
One thing Mr Hunt is expected to do is extend the fuel duty freeze that has been in place since 2011. The government has been seeking to create dividing lines with Labour and foster a “pro-car” narrative, so don’t expect prices to rise.
Despite its popularity with Tory backbenchers there has been very little to suggest that inhertitance tax will be reduced or scrapped.
Only four per cent of the wealthier end of the population pay the tax and it would be a gift to Labour with an election in just a few short months.
However, Mr Hunt may seek to woo young voters by giving the green light for a 99 per cent mortgage scheme, as reported by the Daily Telegraph.
This would allow young people to have a much smaller deposit, as little as a few thousand pounds, with the rest of the funds being guaranteed by the government.
However major changes to Stamp Duty are seem unlikely to take place, as the chancellor struggles to find fiscal headroom for broader tax cuts in other areas.
