Hunt is trying to restore Britain’s credibility among investors in the first budget plan since Rishi Sunak replaced Liz Truss as prime minister last month with a promise to undo her economic policy mistakes, notably a series of unfunded tax cuts. Tras’s “mini-budget” in September triggered a bond market meltdown that sent borrowing costs skyrocketing and eventually forced her to resign. “This is going to be a big moment of choice for the country and we’re going to put people before ideology,” Hunt told the Sunday Times. “You’re going to have a Tory chancellor imposing taxes that, you know, go against why he went into politics,” he said, adding: “You have to do what’s right for the country and the situation we’re in and unfortunately that means tax increases.” As well as more spending cuts, Hunt and Sunak are trying to prepare their Conservative Party for tax hikes that could reignite tensions in the party that ousted Truss and allowed Sunak to become Britain’s fourth Conservative prime minister since 2016 . The paper said Hunt planned to tackle a 55 billion pound ($65.1 billion) hole in Britain’s budget by freezing thresholds and benefits for income tax, national insurance, inheritance tax and pensions for another two years.
“I’LL BE HONEST”
He also planned to halve his capital gains tax allowance and lower the threshold for paying the additional rate of income tax to £125,000 a year from £150,000, the Sunday Times reported. “What I can promise people is that I will be honest about the scale of the problem and fair in how I deal with these problems, and yes, that means the people with the broadest shoulders will bear the brunt,” he said. Thursday’s fiscal plan will include forecasts similar to those of the Bank of England (BoE) which earlier this month warned of a long recession ahead. “I think it’s very likely … the question is not really whether we’re in a recession, but what can we do to make it shorter and shallower,” Hunt said in the interview. Hunt said he would seek to work with the BoE to control inflation and rising global interest rates, which are adding pressure to Britain’s economy. “The number one thing I can do is help the Bank of England reduce inflation,” he said, adding that he wanted to give businesses and households confidence to invest and spend. “If I can give them confidence that we have a plan to deal with inflation, to bring stability back to the economy, then … that will get the job done as far as Thursday goes.” The Times reported that Hunt is likely to commit just £20bn to extend the government’s energy bill cap for another six months after April, a third of the estimated £60bn cost in the first six months, meaning bills are likely to rise. But Hunt was also considering a multibillion-pound support package to protect pensioners and benefit claimants from higher energy bills, the paper said. ($1 = 0.8450 pounds) Written by William Schomberg. Edited by Andrew Cawthorne Our Standards: The Thomson Reuters Trust Principles.
