UK welfare budget could be cut to pave way for tax cuts, says Jeremy Hunt

<span>Photograph: Toby Melville/Reuters</span>
Photograph: Toby Melville/Reuters

The UK’s welfare budget could be cut to pave the way for Tory tax cuts, the chancellor has said before the party’s annual conference in Manchester.

Though Jeremy Hunt said the government was “not in a position” to contemplate a decrease in tax immediately, he said the welfare budget could be hit further down the line to foot the bill.

He told the Times that 100,000 people a year were “moving off work into benefits without any obligation to look for work” – a sign he said showed the system was not working.

The welfare system had to be a “mix of carrot and stick”, with more assistance required to help people find work, given there was “no shortage of jobs”, he added.

The UK government is expected to spend about £230bn on welfare in 2022-23, down from £234bn the previous year.

His comments came ahead of the Conservative party conference, starting on Sunday, and after it was revealed that the UK economy grew faster than had first been thought between January and March this year.

Related: Jeremy Hunt urged to spend on public services after inflation bolsters finances

There is no shortage of senior Tory figures urging the chancellor to announce tax cuts, including the former prime minister Liz Truss, one of several expected to speak out against current taxation levels during the conference.

“We should always seek to reduce the tax burden, especially when there’s so much pressure on family budgets,” she tweeted on Friday, adding that she viewed high taxes as the cause of the UK’s “stagnating” economy.

Truss’s mini-budget 12 months ago, delivered by her then chancellor, Kwasi Kwarteng, sent the value of the pound tumbling and mortgage rates soaring because of the market’s adverse reaction to its £45bn of unfunded tax cuts.

The Tories will have presided over, during the time between the 2019 election and the next general election, the biggest set of tax rises since at least the second world war.

Analysis by the Institute for Fiscal Studies thinktank said taxes will have risen to about 37% of national income, equivalent to about £3,500 more per household.

Hunt has previously said he will not make any tax cuts at the autumn statement in November but Truss and 32 other Tory MPs, including the former party chair Jake Berry, have signed a public pledge not to vote for the autumn statement if it contains tax rises.

Related: A year on from Truss’s mini-budget, UK economy is stuck in first gear | Richard Partington

The former home secretary Priti Patel also called on the prime minister, Rishi Sunak, and his chancellor to cut taxes, telling the BBC: “State spending is now nearly £1.2tn, with over £1tn being raised in taxes. This level of spending, borrowing and taxation is unsustainable.

“The British people need a tax break – we need to trust people and businesses to keep more of what they earn and spend their money to support themselves and economic growth.”

With a general election expected in 2024, the chancellor could use his spring budget to unveil tax cuts before the next Tory manifesto is published.

Hunt said: “We’re not in a position to talk about tax cuts at all. The question we have to answer for the British people is: what are you doing to get yourself in a position where you can credibly lower taxes?”