Chancellor Jeremy Hunt will finally deliver an Autumn Budget this week to lay out precisely how he plans to restore order to Britain’s public finances.
Having succeeded Kwasi Kwarteng on 14 October following the debacle of the latter’s ill-conceived “mini-Budget” of 23 September – which tanked the pound and brought a swift end to the premiership of Liz Truss – Mr Hunt postponed an announcement originally intended for Halloween to buy himself more time.
Mr Hunt will now address parliament from the House of Commons on Thursday 17 November.
He is widely expected to unveil a package of tax rises worth £25bn and spending cuts of £35bn in order to plug a £60bn funding black hole in Treasury coffers and reassure global markets that Britain remains a trusted trading partner.
During a round of media interviews on Sunday morning, the chancellor warned that everybody in the UK will end up “paying a bit more tax” as a result of what he has to say.
“We will be asking everyone for sacrifices. But in a fair society, as we are in the UK, there is only so much you can ask from people on the lowest incomes,” he told Sky News show Sunday with Sophy Ridge.
He confirmed that he expects Britain to plunge into recession and said his goal was to make it “as short and shallow as possible” by bearing down on inflation, which currently stands at a 40-year high of 10.1 per cent, leaving the public facing a grim cost of living crisis this winter.
Mr Hunt also said that government support for energy bills will be targeted only at the most vulnerable after April 2023 – a move expected to cost millions of households hundreds of pounds – and pledged “a long-term plan for clean energy, green energy and cheap energy” to ensure that Britain is never again left to the mercy of international events like Russia’s war in Ukraine.
The chancellor has indicated that his cuts will mean tight settlements for unprotected Whitehall departments and that even the embattled NHS will have to find “efficiencies”.
While acknowledging that the health service’s doctors and nurses are coming under “unbearable pressure”, he added: “There is a lot of money going into the NHS and… in the context where funding for the NHS is going up, we need to do everything we can to find efficiencies.”
Mr Hunt told the BBC’s Laura Kuenssberg: “Schools, hospitals, all our public services are having to deal with the cost of inflation. What [they] will see is a government that has a plan to tackle the root cause of those pressures… which are the bills going up, the electricity bill going up, the gas bill going up.
“What we need to do is a combination of short-term support for people who are struggling – and absolutely schools and public services are in that category – but also a plan which says ‘This is how we are going to get through this’.”
Labour’s shadow chancellor Rachel Reeves has cautioned that all of this will amount to “austerity 2.0” while Conservative former Treasury minister Simon Clarke hinted at the prospect of a backbench rebellion over tax when he warned Mr Hunt during his own interview with Sky that he should “make sure we do as much as we can from spending reductions as opposed to tax increases”.
Meanwhile, Tony Danker, director-general of the Confederation of British Industry, has warned Mr Hunt that he must match tax rises in his upcoming announcement with moves to relax rules on immigration, planning and regulations or face seeing businesses go into “hibernation” during a “decade of no growth”.
For his part, new prime minister Rishi Sunak has said Mr Hunt has no choice but to deliver on the expectations of the international markets by putting Britain’s finances on a more sustainable path through tax cuts, without which the country would risk a return to the chaos that ensued in the aftermath of the Truss-Kwarteng announcement of £45bn in unfunded tax cuts seven weeks ago.
