Hunt: I will only cut taxes in a responsible way

Chancellor Jeremy Hunt has said he wants to move towards lower taxes, but will only do so in "a responsible way".

He told the BBC it would be "unconservative" to cut taxes by increasing borrowing.

Mr Hunt is under pressure from some Conservative MPs to reduce taxes in Wednesday's Budget, ahead of an expected general election this year.

A further cut to National Insurance is believed to be among the measures being considered by the chancellor.

In an interview with the BBC's Sunday with Laura Kuenssberg, Mr Hunt said the Budget, when the government's sets out its plans for taxation and spending, would be about "long-term growth".

He said he also hoped to "show a path" towards a lower-tax economy.

"We've been very consistent, that we would only cut taxes in a way that was responsible and prudent," he said.

"The most unconservative thing I could do would be to cut taxes by increasing borrowing."

He added that this would only pass on the bill to future generations.

Overall the amount of tax people pay is still on course to reach record levels, despite the main rate of National Insurance being cut from 12% to 10% in last year's Autumn Statement.

Mr Hunt has repeatedly hinted that he wants to reduce taxes further in the Budget but in recent weeks he has suggested there is likely to be less scope for this than he had hoped.

And with only 72 hours until the Budget, Mr Hunt was firmly in the damping down expectations mode.

At the start of this year, the government's independent economic forecaster, the Office for Budget Responsibility (OBR), had estimated the chancellor had about £30bn of "headroom" to spend in the Budget, after borrowing costs fell sharply.

Since then, borrowing costs have begun to rise again and by the middle of last month, the BBC understands the figure was back to its November level of roughly £13bn.

With the government's spending rules and the OBR breathing down his neck on one side, and the Tory backbenches who want the historically high taxes cut, it is not a comfortable position.

However, there is wide expectation at Westminster that he will cut some taxes, even if the moves are not significant.

Also appearing on the programme, former chief economist at the Bank of England Andy Haldane said he thought the government's self-imposed spending limits - known as "fiscal rules" - were "stunting" economic growth and constraining the chancellor's decisions.

These include getting debt as a proportion of the size of the economy falling in five years.

Mr Hunt said he did not agree the government should change its fiscal rules because he thought "people would interpret that as Britain losing control of its finances".

Recent memories of the meltdown in the financial markets following then-Prime Minister Liz Truss's mini-Budget - which included £45bn of unfunded tax cuts - are a reminder of why such rules exist.

But there does seem to be growing disquiet that the system that is meant to guarantee stability can have a negative impact too.