Hunt’s repeat of the 2p ploy promises political gains and losses

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Jeremy Hunt will present his final pre-election budget later today: I’ll have more on what he does in a special, post-budget newsletter. The FT’s excellent newsletter on the global economy, written by longtime FT newshound Darren Dodd, will have a wrap of all our Budget coverage and comment later this evening (sign up here).

For now, some thoughts about the political aims that Hunt has in his Budget.

The right that says ‘NI’

At the Autumn Statement last year, Jeremy Hunt used most of his “headroom” to introduce a series of genuine “pro-growth” measures: making “full expensing” permanent (a big tax break for companies), increasing the government’s spending on computing power to develop artificial intelligence and further fleshing out its £2.5bn national quantum strategy. He also used £9bn of it to cut national insurance by 2p in a bid to turn around the Conservative party’s flagging electoral fortunes, and because, quite frankly, the internal pressure within the Tory party to do it had become irresistible.

So how successful was the 2p tax cut? In terms of the Conservative-Labour battle, not at all. Since the last fiscal statement, the polls have if anything worsened for the Conservative party. On Monday, polling by Ipsos put Tory support at 20 per cent, the lowest level since its survey began in 1978. The Conservatives have lost three by-elections on the bounce. But in terms of the internal battle within the Tory party, the national insurance cut has done its job, in that Rishi Sunak is still prime minister.

That’s the important political context to understand when Hunt will essentially try to do the same thing with a further 2p cut in national insurance. He will also hope that scrapping the “non-dom” tax regime will cause problems for Labour.

On that last aim, he will surely get at least some joy: scrapping the “non-dom” regime is one of Labour’s few tax rises and it is intended to fund many of their promises. Whatever alternative the party rustles up instead may be unpopular or unworkable or both. As far as the country as a whole is concerned, cutting national insurance did not move the dial in November and I doubt it is going to do so in March. And a Budget that doesn’t move the dial may, in the end, fail in its other aim of protecting Sunak from internal revolt.

Now try this

I had a lovely night at Dorian in Notting Hill a few weeks back for a friend’s birthday (I don’t usually like to schlep out to west London, but seeing as it was their birthday, I felt I ought to make an exception). As it happened, that very night the restaurant discovered it had just been given a Michelin star. One of the chefs, Lauren Joseph, wrote for the FT this weekend about what it was like to work there that night and what it means for the restaurant.

Top stories today

Below is the Financial Times’ live-updating UK poll of polls, which combines voting intention surveys published by major British pollsters. Visit the FT poll-tracker page to discover our methodology and explore polling data by demographic including age, gender, region and more.