Can the Chancellor cut tax bills at the Autumn Statement 2023?

Jeremy Hunt is facing a major financial headache as he contemplates what to do, firstly in the forthcoming Autumn Statement due on Wednesday 22 November, and secondly for the Budget due next Spring. Hanging over his decisions in both is the veritable Sword of Damocles that is the looming general election, which will almost certainly take place during 2024.

Although the UK tax burden is the highest it has been post-WW2, the succession of financial shocks the UK and the World have suffered over the last few years, most recently Covid, the war in Ukraine, and now the dreadful events in and around Gaza, have resulted in an uncommonly hostile financial environment for the Chancellor.

On one hand Mr Hunt appears to have up to £11bn of headroom to fund tax cuts due to borrowing in the year to July being lower than the OBR forecast. On the other hand however, increased interest costs, the massive increase in pension bills caused by the triple lock, a health service under pressure like never before and an economy which at best could be described as “sluggish” suggest this amount and more will probably be swallowed up even if there are no tax cuts.