Are we heading for a General Election in MAY? Jeremy Hunt refuses to rule it out after sinking Starmer's spending plans in his budget… but will the Chancellor's plans be enough to see off Labour

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Jeremy Hunt fuelled speculation about a May election today after using his Budget to wreck Labour’s plans for the economy.

In a highly political Budget, the Chancellor delivered tax cuts for millions of working people – funded in part by levying taxes that Labour had planned to use to pay for its spending plans.

Mr Hunt said his ‘working assumption’ was that Rishi Sunak would call the election in the autumn, potentially giving him time to deliver another tax-cutting mini-Budget before voters go to the polls.

But he pointedly refused to rule out an election in May or June, telling the BBC: ‘It’s a matter for the Prime Minister, it’s above my paygrade but… what we are showing today is what the key division in British politics is – do you believe the way to grow the economy is with more spending higher taxes, what the Labour Party believe, or do you think actually the way to create more jobs and fire up the economy is by reducing the tax burden in a way that is responsible and protects public services?’

In January, Mr Sunak moved to dampen speculation about an early election by revealing that he was working on the assumption that the poll would be called ‘in the second half of this year’. 

Jeremy Hunt fuelled speculation about a May election after using his Budget to wreck Labour's plans for the economy

Jeremy Hunt fuelled speculation about a May election after using his Budget to wreck Labour’s plans for the economy

Sir Keir Starmer urged the PM to call an immediate election, despite the black hole in his own economic plans

Sir Keir Starmer urged the PM to call an immediate election, despite the black hole in his own economic plans

Recent dire opinion polls have reinforced the feeling among Conservative MPs that the PM will delay the election until October, November or even December.

Ministers have also indicated privately that they want to wait until they have delivered the first deportation flights to Rwanda, which are unlikely to take place until April at the earliest – too late to call an election in May.

But a Tory source said the PM had told aides that today’s Budget was one he ‘could take to the country in May if he needed to’.

EXCLUSIVEREAD MORE: Are you a Budget winner or loser? 

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Some strategists believe that tough local elections on May 2 could trigger another round of debilitating Tory infighting. 

There are also fears that small-boat crossings in the summer will dent Conservative prospects if the election is delayed until the autumn.

Mr Sunak’s inner circle had drawn up contingency plans for an election in May. But for a May 2 poll to be called, Parliament would have to be dissolved by March 26, giving the PM less than three weeks to make a decision.

Recent polls have given Labour a lead of 15 to 20 points, pointing to a heavy Conservative defeat. 

One poll this week gave Labour a 27-point lead and put Conservative support on just 20 per cent – a result that would see the parliamentary party reduced to just 25 seats if it were repeated at a general election.

One minister said a May election would be a ‘suicide mission’.

Mr Hunt last night said his 'working assumption' was that Rishi Sunak would call the election in the autumn

Mr Hunt last night said his ‘working assumption’ was that Rishi Sunak would call the election in the autumn

But Labour MP Jonathan Ashworth made a public bet this week that the election would be held in May, saying: ‘I think everything the Conservatives are doing in terms of both their advertising on social media and the political positioning suggests to me that May is their preferred choice.’

Sir Keir Starmer urged the PM to call an immediate election, despite the black hole in his own economic plans. 

But a Tory source accused Labour of ‘playing games’, adding: ‘They are talking up the idea of an election in May just so that they can accuse us of bottling it if there isn’t.’

Small print in today’s documents revealed that the Government has delayed making tough decisions about departmental spending until after the next election. 

The Treasury confirmed that a spending review ‘will come after the general election’, meaning that there will be no detailed plans for Labour to attack.

 

Jeremy Hunt cuts taxes in what could be the last budget before the election as Rishi Sunak plots bold pledge to scrap National Insurance 

By Jason Groves, Political Editor

Rishi Sunak is plotting a radical election pledge to abolish National Insurance in a bid to show the Tories are on the side of working people.

Jeremy Hunt today slashed 2p off the headline rate of National Insurance for the second time in four months – a combined tax cut worth an average £900 a year to those in work.

In a tax-cutting Budget that could be the last before the general election, the Chancellor branded National Insurance an ‘unfair’ levy and pledged further reductions ‘when it is responsible’. 

A senior Tory source told the Mail that the Prime Minister wants to abolish the tax over the longer term – and could put a pledge to do so at the heart of this year’s election manifesto.

The move would cost £50 billion, but Treasury minister Bim Afolami confirmed: ‘We want to eliminate that double tax on work.’ 

Jeremy Hunt today slashed 2p off the headline rate of National Insurance for the second time in four months

Jeremy Hunt today slashed 2p off the headline rate of National Insurance for the second time in four months

But some Tories ask: Where was the game-changing big rabbit from the Chancellor's hat?

But some Tories ask: Where was the game-changing big rabbit from the Chancellor’s hat?

The cut to NI, which will boost the pay cheques of 27 million workers, was the centrepiece of a Budget designed to persuade voters that the Tories are serious about cutting a tax burden which has risen to record levels in the wake of the pandemic and energy crisis.

In a surprise move, the Chancellor also raised the income limit for claiming child benefit, boosting the finances of almost half a million middle-earning families. 

Signalling further ‘permanent’ tax cuts to come, Mr Hunt said today’s measures were designed ‘not just to give help where it is needed in challenging times. 

But because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity’.

The Chancellor triggered fresh speculation that the PM could call an election as early as May 2 when he threw Labour’s plans into disarray by levying taxes that Shadow Chancellor Rachel Reeves had intended to use to pay for her spending plans.

Most senior Conservatives believe Mr Sunak will wait until the autumn before going to the polls, but a source said the PM had told aides that the Budget was one that he ‘could take to the country in May if he needed to’.

Mr Hunt also left the door open to holding a second Budget in the autumn – and some MPs said the Chancellor would need to produce a bigger rabbit from his hat to restore Tory fortunes at the ballot box. Former home secretary Suella Braverman said she welcomed ‘some of the changes’, but added: ‘Today’s Budget is not enough’.

In other key measures:

  • Mr Hunt scrapped the existing tax breaks for wealthy non-doms, generating £2.7 billion a year;
  • He said personal taxes were now at their lowest level for at least half a century – and the lowest in the G7;
  • The Office for Budget Responsibility predicted that inflation would fall to its target level of 2 per cent in June – almost a year earlier than had been expected;
  • The Chancellor pressed ahead with an extension to the windfall tax on North Sea oil and gas, despite a revolt by the Scottish Conservatives;
  • Labour admitted it may have to raise taxes after Mr Hunt’s decisions on non-doms and the windfall tax blew a hole in its spending plans;
  • The Chancellor froze fuel duty for the 14th year in a row, saving the average driver £50 this year;
  • The OBR warned that immigration levels are likely to be 20 per cent higher as employers struggle to fill vacancies left by the rising number of people on long-term sickness benefits;
  • A new tax on vaping was introduced, alongside a hike in duty on tobacco that will put 40p on a packet of cigarettes;
  • Mr Hunt faced a backlash after ignoring pleas to increase defence spending.

Today’s National Insurance cut cost £10 billion and will benefit 27 million people in work. 

The standard rate, which was 12p before November’s Autumn Statement, has already been cut to 10p and will now fall to 8p next month.

The National Insurance cut cost £10 billion and will benefit 27 million people in work

The National Insurance cut cost £10 billion and will benefit 27 million people in work

A worker on an average wage of £35,000 will gain £450 a year. But because the Chancellor cut NI by an identical sum in November the total package is worth £900. 

Those earning more than £50,000 will gain almost £1,500 a year from the two tax cuts. The combined personal tax rate of income tax and NI will now fall to just 28p, which the Treasury said was the lowest level for at least 50 years.

However, a six-year freeze in tax thresholds, coupled with other rises introduced to pay for pandemic spending, mean the overall tax burden will continue to rise in the coming years. 

EXCLUSIVEREAD MORE: Are you a Budget winner or loser? 

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Treasury sources said abolishing NI for employees would cost £50 billion, but would benefit average workers by £1,800 a year.

Mr Hunt said levying a second tax on income was an ‘unfair’ form of ‘double taxation’. He told MPs: ‘Our long-term ambition is to end this unfairness.

‘When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high-quality public services, we will continue to cut National Insurance as we have done today so we truly make work pay.’

But the move does nothing for pensioners, who do not pay NI. Dennis Reed, director of campaign group Silver Voices, said the focus on NI rather than income tax was ‘bitterly disappointing’.

Former Tory Cabinet minister Sir David Davis said that cutting income tax instead would have encouraged more over-65s to remain in the workplace.

‘I would not have gone for National Insurance, I would have gone for reducing income tax,’ he said.

Mrs Braverman added: ‘I do regret that income tax was not chosen as the tax to cut today over National Insurance because pensioners have lost out as a result.’

Sir Keir Starmer said the Budget was the ‘last desperate act of a party that has failed’, adding: ‘Britain in recession, the national credit card maxed out, and, despite the measures today, the highest tax burden for 70 years.’