LONDON (Reuters) – Britain’s Finance Minister Jeremy Hunt said the budget plan he is due to announce on Thursday will include tax hikes to fix public finances and ease a potentially long recession, it reported on Saturday. The Times newspaper.
Jeremy Hunt is trying to fix Britain’s public finances – and its credibility with investors – with his budget plan, the first since Rishi Sunak replaced Liz Truss as prime minister.
Liz Truss’ “mini-budget” tabled in September sparked a bond market meltdown that sent borrowing costs skyrocketing and eventually forced her to quit.
“It will be a great moment of choice for the country and we will put people before ideology,” said Jeremy Hunt in an interview with the British daily.
“You have to do what’s good for the country and the situation we’re in and unfortunately that means tax increases,” he said.
Along with further spending cuts, Jeremy Hunt and Rishi Sunak are trying to prepare their Conservative Party for tax increases that could reignite tensions within the party.
The minister plans to tackle the £55bn (€62.88bn) hole in Britain’s budget by freezing thresholds and allowances on income tax, national insurance, inheritance tax and pensions for two additional years.
“I WILL BE HONEST”
Jeremy Hunt also reportedly plans to halve the capital gains exemption and lower the threshold for paying the additional rate of income tax from £150,000 to £125,000 a year, according to the Sunday Times.
“What I can promise people is that I will be honest about the extent of the problem, and fair in how I tackle these problems, and yes, that means people with the biggest shoulders wide will bear the heaviest burden,” he said.
The budget will include forecasts similar to those of the Bank of England (BoE), which warned of a long recession ahead.
“I think it’s very likely…the question isn’t really whether we’re in a recession, but what we can do to make it shorter and shallower,” he said. said in a daily interview.
The finance minister added that he would seek to work in cooperation with the BoE to control inflation and the global rise in interest rates, which is adding to strains on the UK economy.
“The first thing I can do is help the Bank of England bring inflation down,” he told the newspaper, adding that he wanted to give businesses and households confidence to invest and spend. .
“If I can give them confidence that we have a plan to fight inflation, to bring stability to the economy, then…it will be a job done, as of Thursday.”
According to the Times, Jeremy Hunt said he could commit just £20bn to extending the energy price cap for another six months after April, a third of its estimated £60bn cost. during the first six months.
The minister, however, plans to put in place a set of support measures worth several billion pounds to protect pensioners and recipients of social minima from rising electricity prices, according to the newspaper.
(Written by William Schomberg; French version Kate Entringer)
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