Jeremy Hunt cut another 2p off national insurance and vowed to abolish the tax altogether to save workers thousands of pounds.
An upbeat Chancellor yesterday told the Daily Express that he was confident "better times are ahead" as inflation heads back to normal levels.
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In the final full Budget before the general election, he announced a package to inject cash back in family finances with child benefit reforms as well as freezes on fuel and alcohol duties.
Speaking to the Express, Mr Hunt insisted his plan for the economy would provide the "growth the country needs."
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He added: "My hope is that the doom and gloom of the recent past is now behind us.
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"I truly believe we have turned a corner and that our growth which is forecast to hit 2% next year can go even higher.
"It's much better news for the economy and for Britain.”
Chancellor Jeremy Hunt announces national insurance cuts (Image: House of Commons)
Mr Hunt announced another 2p cut to national insurance in April that means the rate will have fallen from 12p in the pound to 8p in just a few months.
It means an average ￡900 back in the pay packets of the country’s 27 million workers.
He told the Commons that imposing NICS as well income tax is “unfair” and “double taxation”.
“When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high quality public services, we will continue to cut National Insurance as we have done today so we truly make work pay,” he added.
The intention is to phase it out over the course of the next parliament if the Conservatives remain in power.
UK Prime Minister Rishi Sunak And Chancellor Jeremy Hunt Make Post Budget Visit To South London (Image: Getty)
Mr Hunt said he was putting the country back on the path to lower taxes but insisted he will not take risks with the economy.
He told the Express: "People should have confidence that we are taking a responsible approach.
"These extra tax cuts really do make a difference and will encourage more people into work.
"We have got a bigger growth forecast over the next five years than France, Germany and Italy and we are doing it without raising borrowing.
"We are taking a responsible approach and with inflation coming down to less than two percent we are in good shape going forwards."
Mr Hunt has made national insurance cuts his priority over reducing income tax as it helps to boost employment and is also cheaper to carry out.
But many older voters are upset that focusing on the work tax means there is nothing to help them from being dragged into paying tax on their pension after triple lock inflation-matching increases of recent years and frozen threshold means they are dragged into paying levies on the cash.
Around 800,000 more older people are expected to start paying income tax on their pension from April.
Mr Hunt insisted better public services and sound finances are a crucial part of the package for senior citizens.
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He told the Express: "The big thing for pensioners is that there are worries that bringing down taxes will affect public services, but that won't happen. Services will get better and we won't ramp up borrowing to do it.”
Silver Voices director Dennis Reed said: “The Budget was a stunning miscalculation by the Chancellor. He failed to mention older people or the word pensioner once in his Budget Speech.
“He did not commit to the triple lock on state pensions beyond this year and did not recognise that older people do not benefit from National Insurance reductions.
“In failing to unfreeze tax allowances, 800,000 more older people will start paying income tax on their modest pensions from this April.”
Almost seven million people will either be dragged into income tax for the first time or shifted into higher bands by 2028/29 as a result of the decision not to raise thresholds in line with inflation.
Mr Hunt offered more help with child benefits for parents earning more than ￡50,000 to end rules that can leave some high earning households claiming while single parent middle earners miss out.
The Chancellor also announced he will end the non-dom tax status that allows people who are not classed as permanent UK residents from lowering how much they pay.
It was similar to a policy already announced by Labour and leaves the party scrabbling to make up the shortfall it will now face in its spending plans if Sir Keir Starmer wins power.
Mr Hunt said inflation is set to fall to below the Bank of England’s 2% target “in a few months’ time”, which will significantly ease the cost of living crisis.
10 things you need to know about today's budget... pic.twitter.com/jVL0W4sCdk
— Jeremy Hunt (@Jeremy_Hunt) March 6, 2024
Fuel duty and a “temporary” 5p cut will be extended for a further 12 months, while alcohol duty will remain the same until February 1 2025.
Independent forecaster the Office for Budget Responsibility expects the economy to grow more than than previously expected.
National income is set to rise by 0.8% in 2024, up from the 0.7% forecast in November, and 1.9% next year – up from 1.4% on the autumn forecast.
Growth is expected to be 2% in 2026, again slightly higher than previously expected.
“Because we have turned the corner on inflation, we will soon turn the corner on growth,” Mr Hunt said.
We're cutting taxes again, with a further 2% cut in National Insurance - from 12% in November to 8% in April.
Taken together with the measures at the Autumn Statement, that means someone on the average salary will save around ￡900 a year. pic.twitter.com/NRmrB7aeZN
— Jeremy Hunt (@Jeremy_Hunt) March 6, 2024
Sir Keir said the Budget was the “last desperate act of a party that has failed”.
“Britain in recession, the national credit card maxed out, and, despite the measures today, the highest tax burden for 70 years,” he said.
“The first Parliament since records began to see living standards fall, confirmed by this Budget today.”
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Paul Johnson, director of the Institute for Fiscal Studies think tank, said: “Come the election, tax revenues will be 3.9% of national income, or around ￡100 billion, higher than at the time of the last election. This remains a parliament of record tax rises.
“While the OBR got a little more positive in its projections, the picture on living standards also remains dismal. On average, households will be worse off at the time of the next election than they were at the last, following nugatory real earnings growth.”
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