Jeremy Hunt is about to disappoint his party

In a week’s time, Jeremy Hunt will stand up at the despatch box and unveil the Spring Budget. This event has long been seen by Tory MPs as a key marker ahead of the general election. It is the last big set piece event in the calendar between now and the short campaign. Ministers, too, have raised expectations about what could be in it – with Rishi Sunak telling The Spectator in December to expect a ‘gear shift’ in taxation.

However, the problem for Sunak and Hunt is that they are likely to disappoint. Despite the government recouping record revenues in January, the public finances are not as healthy as was predicted at the beginning of the year. Expected rate cuts failed to transpire as inflation has remained stubborn. Instead, high debt servicing payments and other spending promises (in areas like healthcare and childcare) mean Hunt and Sunak are boxed in.

For a party that wants to fight the next election on tax cuts as a dividing line, Hunt could have little to announce to help that narrative come next Wednesday. Treasury sources suggest that any tax cuts will not match in scale those announced in the Autumn statement, when Hunt announced a 2p cut to national insurance. There could be a further cut to national insurance (if not income tax) but it would be small.

As for the other options that have been mooted in recent months, a cut to inheritance tax is now very unlikely. It was seen as a measure they would only get away with politically if everything else was going right. But the absence on an offer here will be a disappointment to Tory MPs in blue wall seats who saw a cut to inheritance tax as a way to appeal to constituents whose main asset is their home.

There is a push from some Tory MPs to call on Hunt to look at unfreezing tax thresholds given fiscal drag means few feel particularly thankful for the NI cut. However, this is very expensive to do so it is unlikely. One area where MPs are lobbying for a win is on the so-called tourist tax. As Chancellor, Sunak axed tax-free shopping for tourists – only for Liz Truss to bring it back and then Hunt undo it as part of his effort to calm the markets following the mini-Budget. The argument now is that it is holding back the economy and hurting retailers given the benefit exists for tourists in Paris and beyond. Hunt told MPs at a private dinner at Mel Stride’s home last week that he was in listening mode. However, to move on it would be to undo some of Sunak’s No. 11 legacy.

It means there is some trepidation about next week’s event. Hunt will struggle to live up to expectations. Given the government received little in the way of a boost at the last fiscal event, there’s scepticism this one will move the dial at all.