CHANCELLOR HUNT yesterday announced tens of billions in tax rises and spending cuts in his Autumn Statement.
Hunt acknowledged that the UK was in recession but said his plan would help rebuild the economy and reduce debt.
He announced a freeze in income tax thresholds, meaning millions of people will pay more in tax as their wages rise.
Help with energy bills is also being cut back with typical bills rising from £2,500 a year to £3,000 from April.
But extra payments are also coming: £900 for those on means-tested benefits, £300 for pensioner households and £150 for those on disability benefits.
The state pension, benefits and tax credits will meanwhile rise by 10.1%.
The National Living Wage will increase from £9.50 an hour for over-23s to £10.42 from April.
However, the point at which the highest earners start paying the 45p in the pound top rate of tax is being lowered from £150,000 to £125,140.
Energy firms are meanwhile to be hit with an expanded windfall tax of 35%, up from the 25% already levied.
And electric vehicles will no longer be exempt from vehicle excise duty from April 2025.
He confirmed that there will be spending squeezes on government departments, saying they will have to take ‘tough decisions to deal with inflationary pressures in the next two years’.
Hunt went on to ask the NHS ‘to join all public services in tackling waste and inefficiency’.
‘We want Scandinavian quality alongside Singaporean efficiency – both better outcomes for citizens and better value for taxpayers.’
He added: ‘That doesn’t mean asking people on the frontline to work harder, but rather asking challenging questions on how to reform all public services for the better.’
But he warned that ‘efficiency savings alone will not be enough to deliver the services we all need,’ from the NHS.
He said he is ‘concerned about the sharp increase in economically inactive adults’.
‘I will ask over 600,000 more people on Universal Credit people to meet with a work coach so they can get the support they need to increase their work hours or earnings.’
Hunt added that another £280m will be invested to help the Department of Work and Pensions to crack down on benefit fraud and errors in the next two years.
The financial markets made a muted reaction to the Chancellor’s Autumn Statement.
The pound fell around half a cent against the dollar after Hunt began speaking, to hit a low of $1.1802.
Responding for Labour Rachel Reeves said: ‘The Conservatives have crashed our economy, given up on growth and sent inflation through the roof. As usual, it is ordinary working people who are paying the price.
‘It is a familiar tune,’ Reeves said, paraphrasing the song Every Breath You Take by The Police: ‘Every mortgage they raise, every cut they make, every tax they hike – the Conservatives are costing you.’
The Tories have ‘no plan for the future of our country, the conclusion is that Britain can no longer afford a Tory government,’ Reeves said.
She added that ‘the country is sick of being ripped off by the Tories’.
‘Because of Tory failure, our crumbling public services are set to suffer even more. Ordinary working people lose yet again. Never before have people paid so much in tax, and yet got so little in return.’
She asked how much longer the NHS waiting lists will get, and asked what the long-term effect will be of three in ten school leavers leaving school without a GCSE in maths or English.
Reeves said that the Chancellor and Prime Minister have given up on growth, and that forecasts for growth in the UK economy have been downgraded by the watchdog the Office for Budget Responsibility.
Reeves continued that while the Chancellor claims that his statement is fair, he 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.
Reeves concluded that the Chancellor seems to have confirmed a ‘council tax bombshell’ which will see a £100 rise for a typical Band D property, which will take its total to over £2,000 for the first time.
‘Local people … will be forced to pay more because of the destruction the Conservatives have wreaked on the economy.’
‘Double digit inflation and frozen tax bands are eroding billions away from people, she states.
‘These changes will take £600 from the average person,’ she stated.
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