Chancellor vows to ‘rebuild economy’
JEREMY Hunt promised to “tackle the costof-living crisis” and “rebuild our economy” as he set out plans for tax rises and spending cuts.
The Chancellor said there would be a “shallower downturn” as a result of his measures but the Office for Budget Responsibility (OBR) believed the economy was “now in recession”.
He told MPs his three priorities were “stability, growth and public services”, as he delivered his autumn statement.
Mr Hunt said.“The OBR forecast the UK’s inflation rate to be 9.1% this year and 7.4% next year,” he said.
“They confirm that our actions today help inflation to fall sharply from the middle of next year.
“They also judge that the UK, like other countries, is now in recession. Overall this year, the economy is still forecast to grow by 4.2%.”
Mr Hunt was setting out a package of £30 billion of spending cuts and £24 billion in tax rises over the next five years.
His package is in stark contrast to his predecessor Kwasi Kwarteng’s ill-fated plan for £45 billion of tax cuts, less than two months ago, which spooked the markets, pushed up the cost of borrowing and contributed to the downfall of Liz Truss’ short-lived administration.
Mr Hunt said: “I understand the motivation of my predecessor’s mini-budget and he was correct to identify growth as a priority.
“But unfunded tax cuts are as risky as unfunded spending.”
Mr Hunt said repairing the nation’s finances involved “taking difficult decisions”.
He told MPs: “Anyone who says there are easy answers is not being straight with the British people.
“Some argue for spending cuts, but that would not be compatible with high-quality public services.
“Others say savings should be found by increasing taxes, but Conservatives know that high tax economies damage enterprise and erode freedom.
“We want low taxes and sound money. “But sound money has to come first because inflation eats away at the pound in people’s pockets even more insidiously than taxes.
“So, with just under half of the £55 billion consolidation coming from tax, and just over half from spending, this is a balanced plan for stability.”