eremy hunt is expected to pledge to help the economy weather “the economic storm” as he unveils a “dazzling” £54bn package tax hikes and cuts in its fall statement on Wednesday.
Chancellor will vow to make “tough decisions” as he lays out plan to close an estimated £50-60bn fiscal black hole, reduce double digits inflationand lessen the pain of an expected recession.
Mr. Hunt is expected to be the House of Representatives that its economic plan will put the country “on a balanced path to stability” and tackle the “enemy” of inflation, which hit a 41-year high of 11.1 percent on Wednesday.
In the statement due at 11:30 a.m., he is expected to impose stealth taxes by freezing the rates at which workers pay higher rates, putting more into higher tax brackets.
It is thought he will raise the minimum wage and lower the threshold for paying the top rate of 45 per cent income tax from £150,000 to £125,000.
The Chancellor is also expected to push ahead with controversial plans to allow local authorities to further raise council taxes without referendums, despite the policy proving controversial in opinion polls.
He has already confirmed that the energy bill support package, proposed under Liz Truss for two years, will be adjusted from April.
Meanwhile, the Office for Budget Responsibility (OBR) will release its long-awaited forecast later Thursday, which is expected to spell out the bleak outlook for an economy teetering on recession.
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Treasury Select Committee Chairman ‘satisfied’ independent forecast to be released with statement
Harriett Baldwin, chair of the Treasury Select Committee, said she was “gratified” that the government will release an OBR forecast today alongside its fall statement.
Ms Baldwin told Times Radio: “That’s the main thing we’ve been asking for and we’re glad we’re going to see it today”.
The Conservative MP said the Treasury Committee hoped the chancellor’s statement would help the UK’s “productive growth capacity”, but expected it to bring some “delays in infrastructure projects”.
Ms Baldwin added that she expected more interest rate hikes later in the year but was concerned that something had “gone wrong” in the Bank of England’s forecasting models, “particularly around labor market tightness”.
Under September’s disastrous mini-budget, no OBR forecast was produced and released, sparking controversy given the magnitude of the measures announced in the package that shocked financial markets.
Pictured: Jeremy Hunt prepares the fall statement
Energy tax can go up
According to reports, Mr Hunt is preparing to hit power generation companies with a 40% windfall tax on their “excess returns”.
The chancellor could announce a levy on extra profit from generators above a certain price per megawatt hour.
He also allegedly planned to increase the existing windfall tax for oil and gas operators in the North Sea, increasing the tax from 25% to 35% and extending it for two years until 2028.
Prime Minister Rishi Sunak had initially refused to introduce a windfall tax, but did so in May as chancellor under pressure from opposition parties.
What key areas will be covered in the statement?
There will be several key areas that Jeremy Hunt is expected to address in his fall statement, all of which will have an impact on the personal finances of millions of households.
Among them will be:
– Tax increases: Mr. Hunt has already committed that we will all pay more tax after the declaration. He is expected to freeze rates and have workers introduce new tax brackets, which will move more towards higher tax rates as inflation rises.
– Cuts: The plan is expected to include billions of pounds in government spending cuts. However, the key details of exactly where these cuts will fall and which public services will be affected are not yet clear.
– Energy prices: Jeremy Hunt has already said the government’s energy price guarantee, which provides support for the cost of utility bills, will be amended from April and will not last two years in its current form as planned under Liz Truss. Exactly what support will come from then is expected to be revealed.
– Benefits: The chancellor is expected to say whether benefits will be increased with inflation, which is currently above 11%. It was under pressure to make the pledge, and Rishi Sunak, when he was chancellor, had previously supported the move.
Why is the Autumn Declaration taking place today?
Good morning and welcome to our live coverage as Chancellor Jeremy Hunt prepares to unveil a painful combination of tax hikes and spending cuts in his fall statement.
The statement must be submitted by noon, though the timing may change.
What exactly is the fall statement? Traditionally, the Chancellor unveils their budget in the spring, and the fall statement serves as an update six months later.
However, this Autumn Statement is delayed. It was supposed to take place on Halloween after Liz Truss’s disastrous ‘mini budget’ in September, which shocked the markets.
New Prime Minister Rishi Sunak and Chancellor Jeremy Hunt pushed the timing back to mid-November.
This is widely expected to mean we will all pay more tax and cuts are also looming to close a reported ‘black hole’ in public finances of £50 to £60 billion.