Jeremy Hunt will cut the national insurance budget by 2p on Wednesday, the Guardian understands, in a move designed to provide voters with a pre-election giveaway but which could mean further deep cuts after the election.

The chancellor is preparing to announce a second major cut in employment tax in a year, after deciding to cut national insurance rates by 2p in last autumn’s statement.

Wednesday’s move will save the average earner £450 a year, adding up to last year’s cuts to a total saving of £900. However, the Prime Minister has been considering further cuts to public spending after the election as a way of paying for tax cuts, despite warnings from economists that the move would lead to a collapse of public services.

Hunt and Prime Minister Rishi Sunak have spent the past few weeks looking for ways to deliver tax cuts on the scale announced last year to boost the Conservatives’ sluggish poll numbers in their last budget before the election.

Some Conservative MPs have urged the chancellor to focus on cutting income tax, which would be more costly but better understood by most voters. The party’s poll gap has widened by one percentage point since last year’s cuts to universal coverage, from 19 to 20 points.

Tory whips have been told to prepare to rush through emergency legislation after the Budget, which is needed to implement cuts to national insurance.

Sunak promised to lower income tax rates when he was chancellor, but this is Reversed by Hunter This comes in his first autumn statement of 2022, as the government scrambles to undo the damage caused by his predecessor Kwasi Kwarteng’s “mini-budget” just a few months ago.

While the reduction in National Insurance rates itself could save workers hundreds of pounds a year, the Treasury’s decision to freeze the salary thresholds for National Insurance and cash income tax will offset the impact of the tax cut. Labor estimates that even a 2p fall in GNI would mean the average household would earn £1,040 less per year than the threshold as inflation rises.

Government sources said forecasts provided by the Office for Budget Responsibility last month provided the chancellor with spending of around £13bn before he reneged on a pledge to reduce debt as a share of economic output within five years.

Hunt is expected to announce a series of revenue-raising measures on Wednesday to help pay for NI cuts (which will cost around £10bn a year) and another freeze on fuel duty (which will cost another £5bn).

Measures discussed include Limiting tax deductions for non-residentstax on e-cigarette products, increase short holiday tax, Extend energy windfall tax and keep increasing Business class flight tax.

The chancellor has also been considering lowering public spending forecasts after the election. Forecasts drawn up after the Autumn Statement assumed departmental budgets would rise by 1% above inflation each year during the next parliament, but Mr Hunt has been considering reducing this to 0.75%.

Economists and public sector experts warned the move would mean budget cuts of around 20% for unprotected departments such as justice, local government and the interior ministry during the parliamentary period.