JEREMY Hunt has gone back to the drawing board ahead of the Budget to tackle a £2billion funding shortfall.
The Chancellor is under pressure to trim spending as several measures to boost growth failed to hit targets.
GettyJeremy Hunt is attempting to tackle £2billion funding shortfall ahead of the Budget on Wednesday[/caption]
Mr Hunt is said to have been in meetings for two days trying to finance tax cuts next week.
The pre-election Budget will need to be slimmed down further as officials try to find revenue raisers to plug gaps.
Mr Hunt is also poised to reduce spending growth for the next Parliament which will hit Whitehall departments.
The headache comes as Downing Street wants to focus on cuts to personal taxation.
The Treasury has been looking at new proposals to raise money to deliver either a cut to income tax or national insurance.
A reduction by 2p in the latter — following a similar cut last month — would cost £10billion.
Mr Hunt has already said there will be less scope for cutting taxes in the Budget than in the Autumn Statement.
Officials have been working on plans to scrap or scale back the UK’s non-dom tax rules which could help raise £3.6billion — despite previously resisting the idea.
And an extension to the windfall tax on the profits of oil and gas companies beyond 2028 is also under consideration.
Meanwhile, former Chancellor George Osborne said there were rising tensions between Mr Hunt and Rishi Sunak.
He said: “I think No10 was interested in cuts in the headline rate of income tax.
“The problem is that this is regarded as inflationary by the Office for Budget Responsibility.”
Red tape cap plan
By Martina Bet
BUSINESSES could save billions of pounds in red tape under plans being proposed to Chancellor Jeremy Hunt.
He has been urged to consider a cap on regulatory costs, with a watchdog to prevent the Government imposing red tape without considering its impact.
Leading the move, Tory MP John Penrose told The Sun: “We don’t give red tape costs a budget. Governments behave as though it is free.”