Jeremy Hunt is expected to use next week’s budget to cut national insurance rather than income tax as he announces a new levy on vaping.

The chancellor has significantly scaled back his planned cuts after official forecasts suggested he will have much less money to spend than expected, according to today's Times.

The two main tax cuts expected in the budget are a 1 percentage-point reduction in employee national insurance, at a cost of about £4.5billion a year, and an extension of the fuel duty freeze at a cost of £1billion a year.

However, a leading think tank has warned that the government should not cut taxes in the upcoming Budget, unless it can spell out how it will afford them.

Clarity on spending

The chancellor has hinted he would like to lower taxes in what could be the last Budget before a general election.

But the Institute for Fiscal Studies (IFS) said the case for tax cuts was "weak" and said the chancellor should not go ahead with them, without providing specific details of where the axe would fall.

Any tax cuts "should wait" until the chancellor was able to do a detailed spending review, the think tank said.

"We don't think we should be implementing certain tax cuts now, essentially that are paid for by uncertain spending cuts that might never be delivered," IFS deputy director Carl Emmerson said.

Scottish budget

Meanwhile, in Scotland, MSPs will debate and vote on the Scottish Government's draft budget later today.

Proposals include new 45% and 48% tax bands for higher earners and a "fully funded" council tax freeze.

Scotland's 32 local authorities have already been offered £147m as compensation - with an extra £62.7m for those that freeze council tax.

First Minister Humza Yousaf said the budget would give more funding to health, education and the police.

The government's other budget plans include a new tax band of 45% for those earning between £75,000 and £125,140.

The top rate of tax, paid by those earning more than £125,000, would also rise from 47% to 48%.

Other proposals include an increase the Scottish Child Payment from £25 to £26.70 from April and £1.5m for local authorities to cancel school meal debt.

Funding for NHS boards would rise by £550m - or 4.3% - and amounts to £13.2bn as part of an "above real terms" rise.

Ahead of the debate, the Scottish Conservatives said the budget was a "desperate attempt" to plug the hole in Scotland's finances.

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