Hunt hits wealthy with higher taxes in £55bn Squeeze on UK

LONDON - Jeremy Hunt targeted wealthy people and energy companies in a £55 billion ($65 billion) package of tax rises and spending cuts aimed at plugging a gaping hole in the UK’s public finances and restoring confidence among investors.

The Chancellor of the Exchequer extended a windfall tax on oil and gas companies and cut the threshold for paying taxes on dividends and wages over £125, 000.

He also raised the minimum wage and targeted support for the most vulnerable people struggling with energy bills and outlined measures to bolster long-term growth.

Hunt’s package imposes pain on the economy as Britons suffer from the biggest squeeze in living standards in memory.

The Office for Budget Responsibility expects disposable incomes to fall seven percent in the next two years, the biggest drop on record and wiping out eight years of growth. Hunt said the economy is already in a recession that will shrink output by percent next year.

Prime Minister Rishi Sunak’s government is seeking to combat inflation and rein in the burgeoning deficit to restore credibility in financial markets, which dumped UK assets in September after a disastrous experiment with deep tax cuts by his predecessor, Liz Truss. Reversing those moves, Hunt will raise the tax burden to the highest since World War II.

“We take difficult decisions to tackle inflation and keep mortgage rates down,” Hunt told the House of Commons on Thursday.

“But our plan also leads to a shallower downturn, lower energy bills, higher long-term growth and a stronger NHS and education system.”

Hunt’s measures arrive at testing time for the Conservative government, which trails the Labour opposition by about 20 points in the polls with just over two years at most before the next general election.