The chancellor presented his autumn statement to parliament on Thursday, packed with £55bn of secret taxes and government spending cuts in a bid to plug the black hole in public finances. But the independent Office for Budget Responsibility (OBR) has warned that UK household disposable incomes will fall by 7.1% over the next two years – the lowest level since records began in 1956/7 and reducing incomes in 2013 levels. Politics Live: Tax burden reaches highest level since WWII Speaking to Sky News, Mr Hunt said it was “a difficult time for everyone” but tax rises and spending cuts were needed to get the economy “on an even keel”. “The next two years will be difficult,” he said. “But I think people want a government that takes tough decisions, has a plan that will bring down inflation, stop these big increases in the cost of energy bills and the weekly shop, and at the same time take action to overcome this. tough period”.
More about the Fall Statement 2022
The chancellor insisted his autumn statement is a “very conservative package” after criticism from some Tory MPs. “The Office for Fiscal Responsibility said yesterday that what we’re doing is actually a shallow recession, it’s saving jobs,” he said. “But what I would say to my Conservative colleagues is that there’s nothing conservative about spending money you don’t have, there’s nothing conservative about not tackling inflation, there’s nothing conservative about bypassing tough decisions that put the economy in good stead road. “And we’ve done all those things and that’s why this is a very conservative package to make sure we get the economy right. “None of this is easy, but it’s the right thing to do.” Former business secretary Jacob Rees-Mogg accused the chancellor of taking the “easy option” in Thursday’s autumn statement instead of cutting public spending more. He said the country needs lower taxes to promote growth. Use Chrome browser for more accessible video player 2:25 Hunt was asked about the fall statement Asked how it could be fair for pensions to rise due to inflation when public sector workers would not see wages rise in line with prices, Mr Hunt said older people could not afford to work harder to improve their fees. “Well, I think the truth is, first of all, pensioners have retired. They don’t have the ability to work longer or work longer hours in the way that people of working age do,” the chancellor said. “But I think it’s wrong to say that it’s only the poorest pensioners who are feeling the squeeze at the moment. “I think this is something that affects everybody and I think it’s right. “Having made that promise to pensioners in our manifesto that we would have this triple lock, I think this is exactly the tough period that people want to get into. “And that’s why I think it’s the right thing to do.” The chancellor added: “We’re not pretending it’s not going to be a difficult time for everyone. But what we have is a plan.” Use Chrome browser for more accessible video player 1:06 “12 Weeks of Conservative Chaos” – Rachel Reeves In yesterday’s autumn statement, Mr Hunt announced economic policies the government hopes will help balance the nation’s finances after the economic turmoil that followed former chancellor Kwasi Kwarteng’s mini-budget. These included: • Freezing income tax thresholds for two more years until April 2028 • Top level income tax is now paid on earnings above £125,140 instead of £150,000 • Pensions will remain triple-locked – with pensioners seeing a 10.1% rise in weekly payments in line with inflation • Benefits will also increase in line with inflation – by 10.1% • The energy cap will rise from £3,000 a year to £2,500 a year after April • The UK minimum wage will rise from £9.50 to £10.42 an hour for over 23s • The windfall tax on oil giants’ profits to be increased from 25% to 35% and extended by two years to March 2028 • Additional cost of living payments of £900 for those on benefits and £300 for pensioners • Spending on public services in England will rise more slowly than planned Click to subscribe to Sky News Daily wherever you get your podcasts As a result of Mr Hunt’s announcements, the UK tax burden will also now be at its highest since the Second World War and there are stark warnings of increased bills and higher unemployment as the recession takes hold – as well as predictions the economy will continue to shrink by 1.4% in 2023. However, most of the tough spending decisions have been put off until after the next general election in 2024. Treasury analysis shows that around 55% of households will be worse off as a result of the measures. Read more: Jeremy Hunt’s autumn statement had all the makings of a Labor budget Labor blamed “12 weeks of Conservative chaos” and “12 years of Conservative economic failure” for the bleak outlook. Shadow chancellor Rachel Reeves accused the government of forcing the UK economy into a “doomsday loop where low growth leads to higher taxes, lower investment and squeezed wages, with the drain on public services”. Use Chrome browser for more accessible video player 3:04 What does the fall statement mean? As Mr Hunt spoke on Sky News on Friday morning, economic think tank The Resolution Foundation published analysis suggesting his autumn tax rises would give the typical household a 3.7% income boost. The foundation said the statement had piled further pressure on the “squeezed middle” and that the focus on “stealthy” tax cap freezes to raise revenue would extend well beyond high earners. The think tank also found that the budget would reverse much of the government’s flattening agenda. “The £15bn of cuts to capital investment announced yesterday will undo 80% of the remaining increases in public investment announced by previous chancellor Rishi Sunak, which underpinned the flat-out agenda,” it said.
