Jeremy Hunt: The next election will be the fight of my life – but I’m up for the battle

Jeremy Hunt will deliver the Autumn Statement on Wednesday
Jeremy Hunt will deliver the Autumn Statement on Wednesday - Geoff Pugh for The Telegraph

Jeremy Hunt wants to make it clear he is not going anywhere.

“Absolutely not,” the Chancellor says, quick as a flash, when asked if he is tempted to stand down as an MP at the next general election.

Few would begrudge him if he did. Mr Hunt’s first day in the Cabinet was more than 13 years ago, back when Sir Alex Ferguson was still managing Manchester United and Nicolas Sarkozy led France.

He has been culture secretary, health secretary - the longest serving in British history - and foreign secretary, plus ran twice for the Tory leadership. But, he insists, he will not call time yet.

“I will be fighting relentlessly to win my seat in Godalming and Ash, where I have a big challenge from the Liberal Democrats,” Mr Hunt says.

“It’s become one of the most marginal seats. So I’m aware that it’s the fight of my life, but I’m up for that fight. And I’m very confident that I will be back in Parliament after the next election.”

It is a clear attempt to squash speculation that surfaced in an Observer report after the Conservative Party conference last month that he was being tipped by senior Tories to stand down.

But it is the Chancellor’s position on another issue that is being watched more closely in the run-up to next week’s Autumn Statement.

Ever since Rishi Sunak became Prime Minister last October, keeping Mr Hunt, 57, in post after his emergency Treasury call-up in the late Liz Truss days, the pair have resisted tax cuts.

Reducing inflation is the number one economic priority, the pair have repeatedly argued in public and private, however loudly their own party’s backbenchers have banged the drum.

But now inflation has been halved this year, delivering one of Mr Sunak’s five promises - the Office for National Statistics confirmed as much this week.

And so, subtly but significantly, the narrative is changing. The focus on inflation is easing, with boosting economic growth the defining ambition of the Autumn Statement being announced on Wednesday.

Mr Hunt reached for a weather metaphor in his Autumn Statement last year, when prices were spiralling and the markets still jittery after the Truss premiership, declaring “we will face into the storm” and do what was needed.

So is the blue sky now poking through? “The storm is clearing,” the Chancellor says, updating his metaphor. “There are still a few dark clouds there. We cannot be complacent. Inflation is still above target and so we obviously need to stick to the plan.

“But this is now a moment when we can start to plan for a post-inflation economy where we’re focusing on long-term growth. I would say if I was going to pick an economy that I think has the most potential anywhere in the world to really spring forward in the decades ahead, it’s ours.”

The optimism, delivered by Mr Hunt on Friday while on a train rushing north to Sheffield from London for a factory visit, early morning sun streaming into the carriage, has implications for the timing of tax cuts.

Throughout the interview, the Chancellor appears to be leaning into the idea that tax cuts may be coming next Wednesday - while never being definitive.

Jeremy Hunt
‘We believe if we’re going to grow the economy, this is going to be an Autumn Statement for growth, then we have to show the country there is a path to a lower tax economy’ - Geoff Pugh for The Telegraph

When asked explicitly if tax cuts will be announced in the Autumn Statement, Mr Hunt lays out his position at length.

First, there is a statement of belief: “I fundamentally reject the Labour consensus that taxes have to ratchet ever higher. And I think it’s incredibly dangerous for us as a country if we get into this easy way of thinking that there’s only one way taxes can go.”

Secondly, there are the caveats. “What we would never do is risk the progress we’ve made on inflation by doing tax cuts that are inflationary, that take us in the opposite direction,” Mr Hunt says, adding borrowing to fund tax cuts would also not work, a nod to Ms Truss.

‘This is an Autumn Statement for growth’

But then he says: “Within that context, I suppose the big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.

“It’s not an easy path. There are difficult decisions you have to take to get there. But we believe if we’re going to grow the economy, this is going to be an Autumn Statement for growth, then we have to show the country there is a path to a lower tax economy.”

The response is striking. The message is not “now is not the time for tax cuts”, the one Mr Hunt and Mr Sunak have been projecting far and wide in the last year.

It appears to be the opposite, that now is the time to show the country there is a path to lower tax.

To double check, the question is asked again, explicitly: Are you saying tax cuts are coming next week?

“Without pre-empting the decisions that the Prime Minister and I make, this is an Autumn Statement for growth,” Mr Hunt says again, appearing to make no attempt to dismiss the idea.

“It’s a turning point for the economy. So our priority is going to be making businesses competitive. In the end, the route to lower taxes is a more productive, more dynamic enterprise economy. So that will be our priority this autumn.”

The news will have Tory MPs rubbing their hands. How far and how fast the Treasury goes, however, is another question.

With inflation still at 4.6 per cent, well above the Bank of England’s 2 per cent target, Government insiders expect next spring’s Budget to have the bigger tax cuts rather than this autumn.

‘Personally uncomfortable with current tax burden’

The Chancellor will not comment on reports that plans for an inheritance tax cut are being worked on and are close to sign-off.

But he does lean in again when asked if the current tax burden - heading towards the highest level since the 1940s, as defined by tax take as a percentage of GDP - makes him “personally uncomfortable”.

“Yes,” he replies. “Taxes are too high and we need to bring that down. Now we have lower taxes than any major European economy, but that should not be our benchmark.

“Because when you look around the world, the most dynamic, energetic, thriving economies are in North America and Asia, where they generally have lower tax burdens. That should be our benchmark.”

The measures in the Autumn Statement, one of two “fiscal moments” in the political calendar that sees taxation and spending measures announced, will not just be about tax.

The Chancellor ordered his team to start working on ideas to boost the fundamental drivers of economic growth just one day after his Spring Budget, according to a Treasury insider.

One long-term plan in train is forcing the public sector to focus on how it can become more efficient, in part through embracing artificial intelligence, to drive up productivity.

The Treasury shared new statistics with The Telegraph on efficiency. An internal Government review has found scores of public sector employees spend eight hours every week on administrative tasks.

The Chancellor’s idea is to use the purse strings to incentivise efficiency projects, expressing willingness to sign off new money for proposals that will lead to workers spending more on the front line.

And so the Home Office has put forward recommendations which would supposedly save an estimated 750,000 hours of police time.

The Education Department, too, is aiming to reduce teacher workload by up to five hours each week within three years via changes in areas such as data or marking.

Determination to boost productivity

It is, of course, much easier said than done - chancellors for decades have been banging on about improving the UK’s internationally lagging productivity. But Mr Hunt is projecting determination.

He says: “If we can increase productivity growth in the public sector by just 1 per cent then we can start to bring down the tax burden, even with the higher cost of the NHS and social care system because of an ageing population.

“Now anyone in the private sector would say increasing productivity growth by 1 per cent is eminently achievable. I’ve got a fantastic new Chief Secretary to the Treasury, Laura Trott. She and I are going to be working to deliver at least that.

“If you look at fantastic institutions like the NHS, police, our state school system, even their biggest supporters would say that they are rife with inefficiency.”

He singles out “the amount of time it takes police officers to fill out forms, nurses who have to be hunched over an IT system, putting in data instead of looking after patients, teachers who spend more time marking homework, and doing non-teaching tasks than actual teaching tasks”.

Another of the drives is already public: A tightening of the unemployment benefits regime to tilt the balance of incentives towards taking up work.

One change will see people who flout requirements to look for work six months into claiming unemployment benefits lose perks like free prescriptions and free bus passes.

Mr Hunt defends the changes, talking up the positive impact a job can have on people’s lives. It is notable that the Labour Party has also talked about reforms in this space.

But the Chancellor declines to confirm whether benefits will be increased in line with October rather than September’s inflation. The smaller inflation figure would save the Treasury an estimated £3 billion.

On another specific, whether he will end a three-year freeze on the Local Housing Allowance that homelessness charities are calling for, there is no indication the answer will be yes.

Hunt denies new version of ‘austerity’

Mr Hunt also defends existing plans to increase public services spending later this decade by just 1 per cent above inflation a year, way below the 3.3 per cent current level.

He denies it amounts to a new version of “austerity” but appears to accept it would mean real terms cuts in unprotected Government departments.

Away from the economic measures, there is the small matter of politics, and the threat of electoral defeat that looms over the Tories, who sit a whopping 22 percentage points behind Labour on the latest opinion poll averages.

Does the Chancellor agree a 1997-style wipeout is coming for the Conservatives?

“Not at all. And there’s two reasons I don’t share that view,” he says.

“First of all, the big difference between now and the run-up to 97 was that voters had made up their mind. They wanted Tony Blair and there was very little John Major or Ken Clark could do about that.

“We know that about 20 per cent of voters say they will vote but they have no idea who they’re going to vote for. And if you look over the last decade, the only thing you can really conclude about politics is that it is incredibly volatile.”

Before time is called on the chat around the train cabin table, there is a chance to briefly probe an aspect of Mr Hunt’s life little-known to the public.

This week the Chancellor revealed on Classic FM that when he was a newer MP he loved Latin dancing so much he would wear a T-shirt under his shirt and, “like Superman”, switch costumes after rushing to a dance club following later Commons votes.

So, is this still happening now he is at the Treasury? “I used to be a very enthusiastic Latin dancer,” Mr Hunt finally says, a train announcement giving him time to think before an answer can be delivered.

“In fact, I used to dance a Brazilian dance called the lambada and I went to the [Rio de Janeiro] carnival three years in a row.

“But - there is a but here - that was before I was married. And I found a married life, politics and Latin dancing are not compatible so I’m afraid I’ve left my dancing years behind me.”

So the dancing shoes are hung up, for now at least. Both he and the Tories will be hoping next year does not prove to be their last tango.

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