Millions are earmarked for a cash boost in the budget, while Jeremy Hunt pushes for tax cuts

JEREMY Hunt last night remained committed to tax cuts in the Budget after better-than-expected economic data.

Senior government insiders said the Chancellor would tap around £13bn of discretionary space for pre-election giveaways.

But they warned they would likely be less generous than last autumn's 2p cut in National Insurance.

The Treasury received a boost yesterday as official figures showed annual borrowing was £10 billion less than previously forecast.

And the surplus in January was £16.7 billion – the highest on record and more than double the £7.5 billion in 2023.

The monthly figures were pushed into the black by the end of state energy support, lower borrowing costs and higher tax revenues.

However, economists warned this was less than the £18.7 billion forecast by the OBR.

It is understood Mr Hunt has decided to cut taxes in the March 6 budget, following a growing outcry from MPs and campaigners.

Cutting income tax, national insurance and further freezing of fuel duties are all being considered.

Sources said the Chancellor would refrain from wasting the entire £13 billion reserve and would likely save around half for a cushion in the public purse.

A Treasury figure said: “After experiencing the biggest tax cut since 1988 last autumn, we want to continue cutting taxes to reward work and grow the economy, but only if it is affordable and responsible to do that.”

Chief Secretary Laura Trott said she would not “speculate” on tax cuts but hinted the economy had “turned a corner”.

John O'Connell of the TaxPayer's Alliance said: “While debt remains a growing problem for public finances, an even bigger problem is the unprecedented pressure placed on household finances by the vice grip of rising taxes.”