‘We’re all going to be paying a bit more tax’
Chancellor warns of sacrifices to improve finances
CHANCELLOR Jeremy Hunt has said everyone will need to pay “a bit more tax” as he declares he will be playing Scrooge in Thursday’s budget in order to get the country’s finances back on track.
He told Sky News’ Sophy Ridge on Sunday that the budget is “not just going to be bad news”, but that the Government will be asking “everyone for sacrifices” as it attempts to restore financial stability in the wake of market turmoil sparked by his predecessor’s £45 billion tax-cutting bonanza.
“We’re all going to be paying a bit more tax, I’m afraid,” he said, adding: “I think what people recognise is that if you want to give people confidence about the future, you have to be honest about the present. And you have to have a plan. This will be a plan to help bring down inflation, help control high energy prices and also get our way back to growing healthily, which is what we need so much.”
Insisting the British public want the Tories to be trustworthy rather than “popular”, Mr Hunt has said the hope for the week ahead is to show the Government has a plan to stabilise the economy.
In an interview with The Sunday Times, he said the “tragedy” of ‘Trussonomics’ was that both former Prime Minister Liz Truss and her chancellor, Kwasi Kwarteng, had the right idea about boosting growth, but said it was a “mistake” to act without showing “we can pay our way as a country”, adding that he will “put people ahead of ideology”.
The disastrous mini-budget may have cost the country as much as £30 billion, according to the Resolution Foundation, potentially doubling the task at hand for the Chancellor, as he seeks up to £60 billion in savings and extra revenue. The think tank’s economists estimate that £20 billion was blown on unfunded cuts to national insurance and stamp duty, with further losses to higher interest rates and Government borrowing costs, The Observer reported.
Labour has called on Mr Hunt to make “fair choices” in his budget. Shadow chancellor Rachel Reeves warned public services are “on their knees”, insisting that “austerity 2.0” is not the right way forward.
JEREMY Hunt has said everyone will need to pay “a bit more tax” after this week’s budget as he warned “sacrifices” are required across the board to get the economy back on track.
However, the Chancellor insisted it is “not just going to be bad news” on Thursday, stressing he is keen to show the British people “the way through” the “difficult” circumstances at hand.
Mr Hunt has declared he will be playing Scrooge as he sets out his vision to restore financial “stability”, with a focus on delivering “certainty” to families and businesses in the wake of the market turmoil sparked by his predecessor’s £45 billion tax-cutting bonanza.
He has said “people with the broadest shoulders will bear the heaviest burden” as he seeks to fill a so-called black hole in the public finances, and is understood to be weighing up a cut to the threshold at which the highest earners start paying the top rate of tax.
He acknowledged during a round of broadcast interviews yesterday that everybody will see a greater burden, going forward. On who will be required to bear the brunt of the extra costs, he said the Government will be asking “everyone for sacrifices”, but said Britain is a “compassionate” country, insisting “there’s only so much you can ask from people on the very lowest incomes”.
Asked if he will therefore be paying more tax after next week, he told Sky News’ Sophy Ridge on Sunday: “We’re all going to be paying a bit more tax, I’m afraid ... but it’s not just going to be bad news.
“I think what people recognise is that if you want to give people confidence about the future, you have to be honest about the present. And you have to have a plan.
“This will be a plan to help bring down inflation, help control high energy prices and also get our way back to growing healthily, which is what we need so much.”
Mr Hunt said he would not be “hiding” any action he chooses to take on the economy when challenged over so-called stealth tax hikes.
The Chancellor is thought to be considering an extended freeze on income tax thresholds to raise extra revenue, which would push more people into higher tax brackets if their wages rise with inflation in an effect known as “fiscal drag”.
Mr Hunt would not be drawn on specific measures to feature in the autumn budget, but said the “principle” is the Government wants to “give people confidence” on the plan for the economy.
He told Times Radio he wants to make any potential recession as “painless” as possible, after GDP shrank by 0.2% between July and September.
The Chancellor also confirmed he will announce the plan for energy bills from April in Thursday’s statement. He told the BBC’s Sunday with Laura Kuenssberg that people will continue to receive support, but there will be “some constraints” to this. “We will continue to support families and I will explain exactly how we’re going to do that,” he said.