Tomorrow will be the last time the chancellor brandishes the budget red box outside number 11 before the election. Will there be any surprises inside . It is the eve of what is probably the governments last set piece before a general election, and speculation over tax cuts surroundsjeremy hunts budget. I asked rishi sunak ally, the former minister liam fox, whther it was time to unfreeze Tax Thresholds. Well, if i had my choice and if i were the chancellor, tomorrow that is what i would be doing. Well be asking labours Shadow Minister For Industry and decarbonisation whether a Labour Government would change the fiscal rules in order to cut taxes . Also tonight. It looks like its going to be a pretty Super Tuesday for donald trump, so can anyone or anything stop him in his tracks on the way to the republican nomination . Music the latest production at the birmingham rep. After Birmingham Council cuts its Culture Budget to zero, is austerity for the arts coming to a town near you . Well bejoined by birmingham reps artisitic director, sean foley, and the outgoing director of the young vic in london, kwame kwei armah. Good evening. The atmosphere around tomorrows budget could be changing. Theres been a feeling of caution since last month when the Office For Budget Responsibility downgraded the economic forecast. In the light of that, would the chancellor really be prudent to cut taxes . Well, tonight theres a sense that something might be shifting. Nick and ben are both here. Nick whacks is expected tomorrow . Well, kirsty we have a Prime Minister and chancellor who would like to do a big bold Tax Cutting Move before the general election, up there with nigel lawson, something thatis there with nigel lawson, something that is visible from space but they are constrained. They are constrained by the fiscal headroom, how much money is there down at the back of the sofa, not enough. So there was an authoritative report in there was an authoritative report in the times this morning suggesting we would see 2 pence off National Insurance, that would be repeating what they did in the oopl. That would be worth £450 a what they did in the 00pl. That would be worth £450 a year. That is £900 a year. The feeling that is not that big bold move. We know there will be more in the budget, we dont know what it is, so let us not pretend. But there is talk maybe there be a temporary cut in vat. Its a regressive tax, if you pull it back that is a progressive move or will we find the National Insurance cut will be mixed in with maybe some Income Tax Cut, if you take one pence off, that is 5 billion, one pence off income tax, thatis billion, one pence off income tax, that is 7 billion, more expensive but you get a bigger bang for your political bucks. This but you get a bigger bang for your political bucks. Political bucks. This is not necessarily political bucks. This is not necessarily the political bucks. This is not necessarily the last political bucks. This is not necessarily the last fiscal| political bucks. This is not necessarily the last fiscal event, it is the last budget but there can be other shenanigans. Let it is the last budget but there can be other shenanigans. It is the last budget but there can be other shenanigans. Let us wait and see. It be other shenanigans. Let us wait and see. It is be other shenanigans. Let us wait and see, it is interesting be other shenanigans. Let us wait and see, it is interesting about i and see, it is interesting about that confer martian, that steer about that confer martian, that steer about what we expect about National Insurance about what we expect about National Insurance because there was a view maybe insurance because there was a view maybe they insurance because there was a view maybe they have leaned towards National Maybe they have leaned towards National Insurance, cuts rather than income National Insurance, cuts rather than income tax National Insurance, cuts rather than Income Tax Cuts on the grounds that cuttings Income Tax Cuts on the grounds that cuttings National Insurance is less inflationary than cutting income tax, inflationary than cutting income tax. That inflationary than cutting income tax, that was circulating today but speaking tax, that was circulating today but speaking to the treasury i get the impression that is not their view and i impression that is not their view and i have impression that is not their view and i have had a steer that they think and i have had a steer that they think neither is necessarily inflationary in the current environment, because it will help the labour environment, because it will help the Labour Market which is the big constraini the Labour Market which is the big constraint on our ability to grow wiihoui constraint on our ability to grow without inflation, that is interesting for that reason, that may be interesting for that reason, that may be they are keeping income tax on the may be they are keeping income tax on the back may be they are keeping income tax on the back bunker, maybe we will see it on the back bunker, maybe we will see it tomorrow but maybe we will see it tomorrow but maybe we will see it see it tomorrow but maybe we will see it as see it tomorrow but maybe we will see it as you referenced later in the year. See it as you referenced later in the year. As see it as you referenced later in the year, as something we know that rishi sunak the year, as something we know that rishi sunak has wanted to do, if they rishi sunak has wanted to do, if they dont rishi sunak has wanted to do, if they dont think it is inflationary, that is they dont think it is inflationary, that is possible a green light for that, that is possible a green light for that, in that is possible a green light for that, in terms of whether it is inflationary, economists think it may be inflationary, economists think it may be but what concerns them is not the inflationary impact it is the impact the inflationary impact it is the impact of the inflationary impact it is the impact of those pencilled in cuts on Public Impact of those pencilled in cuts on Public Services which as we have mentioned Public Services which as we have mentioned many times dont think are oin mentioned many times dont think are going to mentioned many times dont think are going to be mentioned many times dont think are going to be that credible. There mentioned many times dont think are going to be that credible. Going to be that credible. There is a sense of heightened going to be that credible. There is a sense of heightened excitementi a sense of heightened excitement about what might happen tomorrow what have you been hearing . It is interesting what have you been hearing . It 3 interesting what ben is saying, that is possibility that the treasury dont think that an Income Tax Cut would be inflationary because that had been the fear and there is the general view among conservative mps that you get into that territory they be happier, it is interesting they be happier, it is interesting the mood is gloomy, i was speaking to a member of the government on the right, they are saying it will be a dreadful event tomorrow, it will be an un conservative budget. I spoke to another member of the cabinet who is on the right and this they is a no, that cut in National Insurance, that they said could float their boat but interestingly, talking to people on the centre left. These are jeremy hunt ice allies they are saying really now is not the time to be cutting taxes, voters are showing in polls they care about public service, i spoke to somebody close to jeremy service, i spoke to somebody close tojeremy hunt and they said they believed the chancellor is behaving like bat fink, that is a famous 19605 like bat fink, that is a famous 1960s bat Superhero Cartoon From The 60s and his famous saying was, he would say my wings are like sheeted of steel and what this person is saying, is that the chancellor is putting that shield of steel round the Prime Minister with those tax cut, to protect him from the tory right, who want him to go much further on that, and are potentially on the march against him. The chancellors actions tomorrow will be underpinned by the new forecasts from the Office For Budget Responsibility, an organisation that a growing number of conservative mps and commentators argue has become an obstacle to growing the economy. But is that fair . Ahead of this budget theres been swelling frustration in some parts of the Conservative Party towards the Office For Budget Responsibility, for supposedly deciding how much money is available to the chancellor. Some commentators have suggested Thatjeremy Hunt has become a supplicant to the 0br, and its them who are actually governing the country. The conservative mp simon clarke has claimed we have a situation where a group of forecasters determine whats possible. So is this true . Will it effectively be the 0brs budget tomorrow, not his . In a word, no. The 0br was set up by the former tory chancellor George Osborne in 2010 to provide official economic and Public Finance forecasts. Previously, such forecasting had been done from within the treasury and there were concerns about the independence of those forecasts from politicians. The 0br was established in law to do the job entirely independently. The 0br was also tasked with judging whether the government was on course to hit its fiscal rules. And those rules are chosen by chancellors and not the 0br. And jeremy hunts chosen rule is for debt to be protected by the 0br to decline as a share of the economy in five years time. This is the projection from last years autumn statement. Note that debt actually rises over all the preceding four years. This very small decline between 2027 and 2028 of around £13 billion is the target being met. So when journalists and politicians talk about fiscal headroom with the money supposedly available for tax cuts, this is what theyre talking about, something very slender in the scheme of things and inherently uncertain, too. But isnt the 0br, which is chaired by richard hughes, shown here, constantly changing its mind about how much headroom the chancellor has from week to week . Thats what Media Briefings have suggested, and jeremy hunt himself complained in an interview at the weekend at the abs. Forecasts have gone against us, but this is rather misleading because we know from publicly available information that the 0br sent its final underlying economy forecast to the treasury on the 5th Of February and its final Public Finance forecast on the 14th of february. The 0br hasnt updated its underlying assumptions since then. What will have changed, though, is the chancellors muted proposals on tax and spending, which the 0br has to cost. Its these plans that will have affected the amount of projected headroom mr hunt has against his fiscal rules in five years time, not the obvious views of the underlying economy or Public Finances. Public finance experts agree that basing decisions on tax cuts today on relatively small changes in forecasts for the economy and Public Finances in five years time really doesnt make much sense. But be in no doubt, its the chancellor who is making policy on that basis, not the 0br. Earlier i spoke to liam fox, conservative mp and former International Trade secretary. I started by asking him if he feels the 0br is shackling the chancellor. It should be one of the things that the chancellor takes into account. But we know that Economic Forecasting is a lot harder than weather forecasting, it seems. It has proved to be so. The numbers have been way out over the years. I think we need to focus on the Bigger Picture here. When we came to office in 2010, the government deficit was 11 of gdp. That was reduced right down to 1. 8 until we hit covid, and then we hit ukraine inflation, its still half of what it was that we inherited from labour. So thats one thing, looking at the Big Macro Picture is really important in understanding the direction of travel. By that measure, then not only is the 0br, some would say a hindrance to what the chancellor can do, the chancellors own fiscal rules are a hindrance . Well, no. All these things are tools that the chancellor uses to help determine what his economic decisions are. But they become Something Like the gold standard, dont they . Well, you know, as mrs thatcher once said, advisers advise, ministers decide. And yet all we hear about is the 0br and fiscal rules. You know, the fiscal rules say, as defined most recently byjeremy hunt, that debt should decline, has to decline as a share of the economy in the five year period. But it was up last year. Well, its a sensible rule to follow, but as we know, you can tell whether your approach is a sensible one by what the markets do. We are a country that still has to borrow money because we are still spending more than we make. Are we maintaining the confidence of the markets . Is our currency maintaining its value . Of course its been up in recent times and weve seen much greater confidence in the markets, more Foreign Direct Investment coming back into the uk. I think were in a very stable period, but i think that theres all the more reason, if you think about it the other way round, not to disturb that, not to take any decisions that may in any ways make the markets feel uncomfortable. The electorate faces the heaviest tax burden since world war two, and surely that is a pretty poor show. Youve been in powerfor 14 years. Well, and had we not had to spend over 400 billion on the pandemic, had we not spent 70. 8 billion on the Heating Bills following ukraine, think of what we could have done in reducing taxes. Except when you have taken that tax burden down, it hasnt given you a bounce in the polls. So there was a cut of two Percentage Points in National Insurance in november, that hasnt paid you any political dividend whatsoever. Well, i dont believe that cutting taxes is there as a political tool. Oh, it is. Its there to make sure that the economy improves. And you mentioned a word there that i would take issue with, which is growth, because i think that we should be talking much more about Wealth Creation in the economy and notjust growth. For example, there are perverse incentives if youre following that 0ecd terminology of growth. For example, if you bring a million migrants into the country and they all spend money in the shops, that would count as increased Economic Activity and growth, but the gdp per capita would go down. So i think we do have to start thinking more about, from a conservative perspective, how do we have our terminology more aligned to the creation of wealth in the economy . The Financial Times today says it would not be prudent to have cuts in personal taxes in the budget tomorrow. Well, again, thats a wider judgment, isnt it . I think that what we need is to create a stimulus towards Wealth Creation. So should there be a cut in National Insurance rather than in income tax tomorrow . Well, i dont think it makes that much difference in terms of peoples pockets. So should there be a cut . If we can afford to have a cut, we should have a cut, because the tax burden is too high. But we have to look at it against a range of other indicators. Isnt it time to unfreeze the Tax Thresholds . Because, you know, workers are getting to higher levels earlier. You know, there is no reason not to unfreeze. Well, if i had my choice and if i were the chancellor tomorrow, thats what i would be doing. I think that we said to people, because of the pressures of the pandemic, because the government was having to spend and borrow more money, we had to take more money in as taxes. I think no that weve recovered from that, i think the logical thing would be to say to people, thank you very much, youve taken that pressure as part of a national effort, and say thank you and get those thresholds readjusted. 0n the question of what may happen in terms of tailored cuts, there may be a cut to non dom status. I mean, that would certainly, maybe, shoot labours fox, being the word, but that would only raise you, and it sounds like ridiculous to say it, but it would only raise you 2 billion. Its, again, its notjust a question of the amount of money youre getting, pros and cons for each of these, its the impact that will have on investors, on the impression of Britain Being Open For Business abroad. So all of these, every single one of the things youve said to me has a pro and con to it. But the chancellors got to look at the overal