Autumn Budget: Jeremy Hunt announces UK now in recession
It feels like the government's economic policies change more often than we change our underwear nowadays.
What with former prime minister Liz Truss's policies crashing the pound and her own career a few weeks ago, we've got a new prime minister and a new chancellor with a new plan for how best to deal with Britain's floundering economy, in which we face an estimated £55bn hole in public finances, an energy crisis that's not going anywhere, and record levels of inflation.
Chancellor Jeremy Hunt announced these plans today in his Autumn Statement in the commons- and it looks like we should be brace for another round of austerity, as well as tax rises.
"We do not leave our debts to the next generation," 8/10
Next was another mini-budget dig, nothing to see here...
Spending cuts would not be compatible with high-quality public services," 6/10
Then some Tory spin. You are right here, Hunt, so why are you doing them anyway? Indeed, he went on to confirm there will be spending squeezes on government departments. He said that they will have to take "tough decisions to deal with inflationary pressures in the next two years" but added that overall spending on public services will rise, after accounting for inflation though, for the next five years.
\u201c"Our priorities are... public services" says Jeremy Hunt, as he announces plans for yet more cuts to them.\u201d
Then, Hunt announced his tax plans. He said high tax economies "damage enterprise and erode freedom" but said they are in this economic context necessary.
So the top 45p rate of tax is being implemented on those earning £125,000 rather than £150,000 and he is freezing the tax free allowance for two years.
But Labour accused him of introducing stealth taxes. Shadow chancellor Rachel Reeves said in her response to his announcement: "In the last hour, the Conservatives have picked the pockets of purses and wallets of the entire country, as the chancellor has deployed a raft of stealth taxes taking billions of pounds from working people."
\u201cTAX RISES BY THRESHOLD CUTS/FREEZE\nThe 45p rate of tax will now be paid on earnings above \u00a3150,000 to \u00a3125,000.\n\nPersonal allowance, National Insurance threshold, Inheritence tax thresholds held until April 2028\n\nDividend allowance cut \u00a32,000 to \u00a31,000 then \u00a3500\n#AutumnStatement\u201d
Here we go. Labour MPs jeered and shouted, given that windfall taxes were their idea and when Sunak first copied them when he was the chancellor, he used a bizarre euphemism to try and stop people realising he was nicking a Labour policy and u-turning on his previous stance on it.
Now, Hunt has said the taxes were good as long as they "do not deter investment" and he has increased them from 25 per cent to 35 per cent.
He said there'll be a 40 per cent tax on profits of older renewable and nuclear electricity generation and that all the measures will raise £14bn next year alone.
Reeves said that after months of resistance from the prime minister, the government "has finally been dragged kicking and screaming to extend the windfall tax that Labour had been calling for since January".
“It won’t be possible to return to the 0.7 per cent target until the fiscal situation allows,” 3/10
Hunt was speaking about cutting overseas aid which never sits well with us. The UK has a moral obligation to help other countries less advantaged than it.
"Now would be the wrong time to step back from our international climate responsibilities," 9/10
But despite issues with the economy, Hunt at least confirmed the government remains fully committed to the Glasgow climate pact agreed at COP26 - including a 68 per cent reduction in emissions by 2030.
A household using a typical amount of gas and electricity will pay £3,000 annually, up from £2,500, as the Energy Price Guarantee rises, Hunt said.
And as people pay more in energy, Hunt has kept a plan to lift the cap on bankers' bonuses.
He is also not changing non-domicile tax rules that allow certain people to pay tax in the UK only on their income in this country.
"Biggest ever cash increase in the state pension," 2/10
Hunt said he would protect the pension triple lock meaning pensions will rise in line with inflation. That's the grey vote sorted for another general election then.
Benefits are also increasing in line with September's 10.1 per cent inflation figure.
And he confirmed that the National Living Wage will be increased from £9.50 an hour for over-23s to £10.42 from April next year.
"There may be a recession made in Russia but there is a recovery made in Britain," 5/10
Hunt distanced the UK's role in contributing to economic issues. He also said "global factors are the primary cause of inflation", blaming the pandemic and the war in Ukraine and claimed the economy is worse in other countries.
Oh the spin, the spin is making us so dizzy...
\u201cHunt: "The OBR confirms that global factors are the primary cause of current inflation."\n\nI look forward to his explanation of secondary causes. Although, I fear, it will not come. ~AA #budget2022\u201d
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