Hunt argues Reeves can avoid tax rises and outlines plan to curb spending and debt

A column by Sir Jeremy Hunt, the former chancellor, argues that a Budget-led tax rise is not inevitable but a political choice. With the Budget now just over eight weeks away, economists have suggested potential increases totaling about £30 billion, roughly 4 pence on the basic rate of income tax. Hunt says the government can avoid tax rises by cutting wasteful public spending and boosting growth through structural reforms rather than higher rates. He cites international evidence that lower taxes can support higher growth and argues that a culture of personal responsibility and reward for hard work is essential to a dynamic economy.

He notes that past Conservative steps such as full expensing for business and a cut of 4p in employees’ National Insurance Contributions showed that lower taxes can coincide with pro-growth policy. He adds that the debate over timing and scale of tax changes is political, not inevitable, and that a government willing to reform spending and welfare could protect essential services without resorting to broad tax increases. Economists have estimated tax rises of about £30billion, but Hunt contends that the country does not have to accept this as a given path for the Budget. Economists predict Reeves will announce higher tax totals, but Hunt frames such increases as a policy choice rather than a necessity.

On the core question of how to avoid tax rises, Hunt lays out three avenues: making public spending more efficient, reforming the welfare system to encourage work, and adopting a growth-oriented debt rule. He argues that with the state spending more than £1 trillion a year, there are many levers that can reduce the need for tax increases while preserving public services. He says the government should push for productivity gains in the public sector and avoid unsustainable pay deals that could feed a cycle of rising costs and disputes. If productivity in the public sector rose toward the long-run private-sector average, public spending could grow more slowly, with the Office for Budget Responsibility estimating potential savings of about £15 billion after three years.

The first lever, he writes, is to run public services more efficiently. Hunt cites the £9.4 billion pay rise offered to public-sector unions soon after Labour’s victory as a missed opportunity—he argues that higher-than-inflation pay should be matched by corresponding productivity gains. He points to examples such as driverless trains already operating safely in parts of the country and suggests reforming procurement and labor practices would allow more targeted investments without ballooning costs. In his view, a productivity-linked framework would help keep public spending in check while maintaining service quality.

A second pillar is welfare reform. Hunt notes that nearly a quarter of the adult population is not in work and that welfare incentives can pull people away from employment. He cites findings that next year an out-of-work household claiming Universal Credit, health benefits, and housing allowances could be £2,500 better off after tax than someone working full-time on the National Living Wage, a gap he argues is unsustainable for public finances and for individuals’ prospects. He advocates reducing the cost of working-age benefits to pre-Covid levels, a move he says could save about £47 billion a year after five years. He stresses that reforms should accompany improved mental health services and social support to help people re-enter work, rather than trapping them in welfare eligibility.

The third lever concerns debt and the fiscal framework. Hunt argues that the national debt is nearing 100% of GDP and that interest payments now exceed the budgets for police, schools, or defence. He notes that markets discount British debt partly due to concerns about inflation and a lack of a credible plan to reduce the stock of debt. He recalls that in 2010 the government reduced the deficit substantially but that borrowing has persisted. His proposed rule is simple: over a Parliament, public spending should never grow faster than the economy. He argues that such a rule would help debt fall as a share of GDP, restore market confidence in Britain’s fiscal prudence, and demonstrate that the country will live within its means. While acknowledging the path will not be easy, Hunt contends that decisive, growth-friendly reform is necessary to avoid a cycle of higher taxes and rising debt that could suppress growth.

The piece closes with a call for a more mature, growth-oriented approach to fiscal policy. Hunt frames these steps as a viable alternative to tax increases, urging policymakers to consider efficiency, welfare reform, and debt discipline as the means to protect public services while supporting economic vitality. He ends by asking whether the Chancellor is listening and whether the country can pursue a “grown-up” government that sustains high-quality public services without compounding tax burdens.