UK Chancellor Seeks to Shift Debate From Tax Cuts to Pay and Benefits
UK Chancellor Jeremy Hunt has warned Tory activists that tax cuts must be funded by squeezed public spending, as he prepares to axe the HS2 high-speed rail project and shrink the civil service.
Treasury officials did not deny reports that Hunt approved plans to scrap the northern leg of HS2 from Birmingham to Manchester, freeing up savings for other transport projects.
“A decision will be announced in due course,” said one Hunt aide, amid growing speculation at the Conservative Party conference that the axe will fall on HS2 before Prime Minister Rishi Sunak’s keynote speech on Wednesday.
Hunt also told the conference he would save £1 billion by freezing civil service hiring, with a plan to eventually cut 66,000 posts and reduce the public sector workforce to pre-pandemic levels.
Downing Street said no emergency cabinet meeting to approve an HS2 decision was planned “at the moment.” A Sunak spokesman said: “No final decisions have been taken on phase 2 of HS2.”
Tory officials believe the HS2 downgrade could be announced Tuesday, allowing Sunak to trumpet “good news” on other transportation schemes.
In a bullish speech, Hunt said: “It’s time to roll up our sleeves, take on the declinists and watch the British economy prove the doubters wrong.”
However, four former prime ministers have already warned that scrapping HS2’s northern leg — possibly terminating the line at Old Oak Common in London — would fuel decline.
Boris Johnson called stopping the line in Birmingham “out of our minds.” Gordon Brown, David Cameron and Theresa May also back the full line.
While awaiting an HS2 decision, Hunt told the conference he would freeze civil service hiring, praising it as “the best in the world.”
Hunt’s plan is to cap civil servants at their current 457,000 until 2025. Allies said this would save £1 billion, as numbers would otherwise rise 40,000 on projections.
They said this would force departments to cut civil servants to under 400,000 by 2028, below pre-Covid levels.
Hunt said: “Even after the pandemic is over we have 66,000 more civil servants than before.”
But union chief Mark Serwotka warned shrinking an “already overstretched and under-resourced” civil service would hit vital services.
“If ministers want fast-moving border controls at our ports and airports, an end to backlogs for those seeking driving licences or applying for driving tests, they must employ more civil servants, not less,” he added.
The conference has seen senior Tories, including ministers, urge immediate tax cuts before the 2024 election.
But Hunt sought to shift focus to pay and benefits, saying tax cuts require efficient public services and controlled spending first.
Hunt added fighting inflation, not tax cuts, was his priority, calling it “Nothing hurts families more.”
He insisted the plan was working, saying: “The plan is working and now we must see it through, just as Margaret Thatcher did many years ago.”
Hunt confirmed raising the minimum wage from £10.42 to £11, a “pay rise for nearly 2 million workers.”
He also said the government would ensure people actively seek work, saying: “It isn’t fair that someone who refuses to look for a job gets the same as someone trying their best.”
