Jeremy Hunt could have billions extra to play with in his Budget thanks to gas price falls
JEREMY Hunt could have billions extra to play with in his Budget thanks to gas price falls — heaping pressure on him to cut tax this year.
Tory MPs will urge the Chancellor to slash the burden because the scaled-back energy support package will cost 90 per cent less next year.
A Resolution Foundation think-tank report said the Treasury would be in line for a “big windfall” with the outlook “a little less bleak”.
Senior Tory MP Sir Iain Duncan Smith said “We need to start planning for easing the tax burden.
“Forecasts of doom and gloom are wrong.
“The UK economy is in a robust position.
“As we run up to the Budget we should not make the squeeze any worse.
“The rise in corporation tax in April will just squeeze the economy even more.
“But we do need to start planning for easing the tax burden as it hurts individuals and businesses – and get growth going.”
Falling energy prices mean the estimated cost for the energy support package has fallen by around £11 billion for the next 12 months.
But the drop will mean reduced tax receipts from energy producers and generators which could cost around £7 billion.
But a Resolution Foundation report says other taxes will be boosted as lower energy costs raise domestic consumption and firms’ profits.
Households are expected to pay 20 per cent more for energy due to the reduction of government support but overall falling prices will have a deflationary effect.
The energy price guarantee will see the typical household bill at around £3,000 until April next year – up £500 on the previous 12 months.
But Mr Hunt signalled last month that any tax cuts would only come “when the time is right” as he tried to dampen speculation.