UK: Government declares recession

The latest developments

Rishi Sunak has been British Prime Minister for a few weeks. He faces difficult tasks. The most important questions and answers about the situation in Great Britain.

British Treasury Secretary Jeremy Hunt making a statement in the British Parliament.

jessica taylor

The latest developments:

  • On Thursday (November 17) the British government announced a series of far-reaching financial measures to reduce government spending and increase income. Treasury Secretary Jeremy Hunt told Parliament that the UK was in recession. The autumn budget, known as the “Autumn Statement”, includes extensive tax increases for high earners. People with an annual salary of over £125,000 are also to be placed in higher tax brackets. The government also announced that it would levy higher excess profit taxes on energy companies. This alone should flush an additional 14 billion pounds into the state coffers next year. Hunt spoke of difficult decisions that would ensure stability, lower inflation and balance the state budget. This includes significantly reducing public spending in some areas. The finance minister also announced higher spending, for example for the ailing national health service NHS as well as schools and various regions.
  • British Deputy Prime Minister Dominic Raab wants an independent commission to examine allegations of bullying against him. The conservative politician announced on Wednesday (November 16) that he had written a request to this effect to Prime Minister Rishi Sunak. It is about two formal allegations against him. He promised to cooperate and accept “any result”. Raab has been under pressure for days. Several media, citing former employees, reported a harsh tone and even a “culture of fear” in the ministries he headed. It was only on Tuesday that the former highest British official, Simon McDonald, described Raab’s management style as “degrading and aggressive”. Raab vehemently denied the allegations.
  • Shortly after Minister Gavin Williamson resigned over bullying allegations, similar allegations increased pressure on Prime Minister Rishi Sunak. Several media reported on Saturday (November 12) that Deputy Prime Minister and Minister of Justice Dominic Raab had behaved aggressively towards employees. During his first term in office, Raab spread a “culture of fear” in the Ministry of Justice, the Guardian newspaper wrote. According to information from the newspaper “Sun”, Raab is said to have thrown tomatoes through the room out of anger. Insiders quoted by the media have all denied the allegations. The minister is only “direct”. Raab had worked under former Prime Minister Boris Johnson, first as foreign secretary and later as deputy prime minister and justice minister. He is one of Sunak’s closest allies and returned to both posts under him.
  • Minister of State Gavin Williamson resigned from the cabinet on Tuesday (8 November) because of allegations of bullying. Previously, text messages from him to a party colleague had been made public, in which he put pressure on her with harsh words – apparently to get an invitation to the Queen’s funeral service. Williamson’s resignation is likely to raise doubts about Sunak’s ability to steer the fractious Conservative ruling party into calmer waters.
  • Rishi Sunak was appointed Conservative party leader on October 24. A day later King Charles III. appointed Prime Minister. Sunak has work to do: Britain’s financial situation is disastrous. Sunak now has to decide quickly what tax increases and spending cuts he wants to impose. As early as November 17, the government is to present the budget bill to the public.

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Former British Prime Minister Liz Truss in London.

Former British Prime Minister Liz Truss in London.

Hannah McKay / Reuters

When Boris Johnson resigned in the summer, Rishi Sunak had to settle for second place behind Liz Truss in the internal party elimination round. Truss then resigned as prime minister after just 45 days – faster than any other British head of government before her. Her economic and tax plans had become her undoing. Truss had miscalculated.

After Truss announced her resignation, the opposition Labor Party called for new elections. However, these are not provided for by law in Great Britain: the head of the party with the most votes in the general election is automatically prime minister. If, as in the current situation, the head of the ruling party is replaced in an ongoing legislature, no new elections will take place, but an internal party decision. Parliamentary elections are usually held every five years. The next ones are planned for 2024.

The shortest-serving Prime Minister in British history. Portrait: Who is Liz Truss?

It is estimated that up to 45 million Britons – two-thirds of the population – will be unable to pay all their bills without going into debt this winter.

Labor has overtaken the Tories in the polls

Voting intent in the general election, percent of respondents, weighted average

The future prospects for Great Britain have recently deteriorated dramatically. According to economic forecasts, the country is threatened with a recession and inflation rates of up to 18 percent. The NHS national health service is on the brink of collapse. And the massively rising energy prices are likely to limit the new government’s financial leeway, since she probably has to help the British: Many Britons are faced with the choice of either heating their homes or buying food. In many households, there will no longer be enough for both.

With a view to the 2024 general election of the British Parliament, Sunak faces a Herculean task.

Sunak is 42 years old, was born in Southampton and is the son of Indian immigrants. He is the first British leader from an ethnic minority background in Britain. The Oxford graduate comes from a privileged background and has become very wealthy as a banker and the husband of an Indian billionaire’s daughter.

Sunak says of himself that he stands for a stable and responsible policy that relies on “integrity, professionalism and accountability”. In the election campaign to succeed Johnson, he had warned of the very financial chaos that Truss actually caused with her economic policies.

King Charles III  greets Rishi Sunak during an audience at Buckingham Palace on Tuesday.

King Charles III greets Rishi Sunak during an audience at Buckingham Palace on Tuesday.

Aaron Chown/AP

Sunak was Finance Minister under Boris Johnson for more than two years. His handling of the recession during the corona pandemic earned him great respect. His aid measures for the population and the economy were popular, but caused the national debt to swell.

This year Sunak stumbled: his efforts to bring the budget back into balance in the medium term and to curb Johnson’s generosity were punished with falling poll numbers. A report by the “Independent” about his wife Akshata Murthy also caused lasting damage to Sunak’s reputation. The newspaper revealed that Murthy does not pay UK tax on certain earnings – and is believed to have saved millions as a result.

In addition, like Boris Johnson and his wife, Sunak had to accept a fine for a lockdown party in Downing Street. Sunak resigned as Treasury Secretary in July, openly criticizing Johnson’s policies.

To the portrait of Rishi Sunak

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