Chancellor warns ‘everyone will pay more tax’ despite spending cuts

EVERYONE will pay more taxes and see cuts to public services, the Chancellor said ahead of Thursday’s autumn statement.

With Britain’s economy being the weakest of the G7 industrialized countries, Jeremy Hunt also admitted that Brexit was a factor that brought “costs” as well as opportunities.

However, he insisted it could still be a success and said the UK was resilient.

The SNP said the chancellor was planning “austerity 2.0”.

It was reported overnight that Mr Hunt planned to cut public spending by around £35billion and raise taxes by £20billion.

Fundraising measures include freezing the thresholds at which people pay higher rates of income tax, meaning more people will pay extra as their wages rise.

The maximum rate threshold should be lowered from £150,000 to £125,000.

The exceptional tax on energy companies should also be extended for several years.

Speaking on BBC One with Laura Kuenssberg on Sunday, Mr Hunt said: ‘We’re going to see everyone paying more tax. We are going to see spending cuts.

“But I think it’s very important to say that we are a resilient country.

“We are also a compassionate country.

“We will therefore present a plan that will get us through the very choppy waters that we find ourselves in economically, but we will ensure that we protect the most vulnerable and, in particular, respond to the greatest concern of low-income people, which is the rising cost of their weekly store and rising energy prices.

“And economically it also makes sense, because inflation is much higher than it should be, and it destabilizes people’s family finances, in addition to being very bad for businesses and the economy. .”

Paul Johnson, director of the Institute for Fiscal Studies, told the same program that “everyone” paying more tax meant a VAT hike, although increases in income tax and the national insurance are also options.

Britain’s economy shrank 0.2% between July and September, heralding what the Bank of England estimates will be a record two-year recession.

The UK was the only G7 country to see its economy shrink in the quarter, with Germany growing 0.2% and the US 0.6%.

The UK is also the only G7 country to have a smaller economy now than before the Covid pandemic, contracting 0.2%, compared to growth of 0.2% in Germany and 4.2 % in the US, suggesting Brexit is a factor.

Telling him that everyone would notice the tax hikes and cuts, Mr Hunt said: ‘I think people will notice because these are tough decisions, but they will also see that there is a plan to overcome that.

“And if we do that wisely, we can make this recession as short and superficial as possible, and that’s certainly what I will try to do as Chancellor.

“I want people to understand that even though these are tough decisions, we will do it in a way that means we will get through to the other side.

In a dig at his predecessor Kwasi Kwarteng, he added: “But as a country I think we know that the way you deal with problems is to deal with them, not by pretending they are not there. I want to give people the confidence that we actually do.

Asked whether the UK government’s Brexit deal was holding back the economy, Mr Hunt did not deny it was a factor.

He said: ‘Brexit is a big change that the country voted for, and whether it’s a success or not is up to us whether we seize the opportunities of a different kind of economy than we would have. been within the framework of the single European market.

“I believe we can make this a huge success, but it won’t happen automatically.

“I don’t deny that there are costs to a decision like Brexit, but there are also opportunities and you have to see them in the round.

“I think we have to reflect, that’s what we decided to do, and we have to make it a success.”

He denied that the measures in the autumn declaration would amount to austerity, which he defined as “a deliberate choice to make matters worse in the short term for long-term gain”.

He said, “That won’t happen.”

SNP Shadow Chancellor Alison Thewliss said: “A return to Tory Austerity 2.0 would be a hammer blow for millions of people across Scotland and the UK who are struggling to make ends meet.

“The Chancellor should prepare a budget that builds support to put money in people’s pockets and helps to properly tackle the cost of living crisis caused by the Tories – instead it is clear that he intends to usher in a new era of conservative austerity by trying to balance the pounds on the backs of some of society’s most vulnerable.

“The Chancellor must rethink and reject these plans and seek to provide real support as a bitter winter approaches for many – including protecting the triple pension lock, raising benefits in line with inflation, expanding windfall tax and introducing a tax on share buybacks and removing the controversial non-dom status.

“The reality is, however, that we are in this economic crisis precisely because of the damaging decisions taken by Westminster. The only way to properly tackle the cost of living crisis and build a fairer future is with the full powers of independence.

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