Some 'horrible decisions' will be made.
Jeremy Hunt has warned everyone will pay more tax and billions will be cut from public spending in his budget this week – pinning the blame on Liz Truss.
The chancellor refused to rule out a new era of austerity and admitted energy bills would rise further for millions next spring, although he hinted the pensions triple lock would stay.
As the Resolution Foundation calculated the tax-cutting Trussonomics mini-budget during her 49 days as prime minister doubled the UK spending shortfall to £60billion, Mr Hunt said: ‘We actually expanded borrowing.
The result was the Bank of England has to increase interest rates, the cost of mortgages go up and there’s a lot more pain for businesses.
We’re all going to be paying a bit more tax, I’m afraid, but it’s not all bad news,’ he told Times Radio. ‘This will be a plan to help bring down inflation, help control high energy prices and also get our way back to growing healthily, which is what we need so much.’
The chancellor is likely to freeze the tax-free personal allowance at £12,570 and the 40p higher rate of income tax at £50,271 until 2028 in his delayed Autumn statement on Thursday.
He is also likely to cut the threshold for the highest 45p rate of income tax to £125,000. The measures will drag millions of earners into more expensive tax brackets as inflation soars.
The tax rises – plus an increase in levies on oil and gas firms’ huge profits as energy costs soar – are designed to pull in around £20billion alongside an expected £35billion of spending cuts.
Mr Hunt told The Sunday Times some ‘very horrible decisions’ would be made, insisting he could not pull any ‘rabbits out of hats’.
But he insisted: ‘I’m Scrooge who’s going to do things that make sure Christmas is never cancelled.’ Mr Hunt has already said the two-year energy support scheme Ms Truss introduced to cap typical household bills at £2,500 a year will end in April.
Amid fear bills could hit £4,000, he promised support with ‘some constraints’ as the £140billion package was ‘like supporting a second NHS’ – which he also admitted was already ‘on the brink of collapse’.
Ms Truss yesterday lined up with six other living former PMs in London on Remembrance Sunday.
But, on the BBC’s Sunday with Laura Kuenssberg, Mr Hunt said of her plans while in No.10: ‘We have to recognise one of the reasons for the instability that followed the mini-budget was worry that we were exposing public finances to the volatility of the international gas market.’
The Bank of England has forecast our longest recession ‘since reliable records began’. Asked about a return to austerity of the 2010s, Mr Hunt said: ‘We’re a resilient country and we’ve faced much bigger challenges, frankly, in our history.’
MP Simon Clarke led Tory calls for more cuts than tax rises, insisting: ‘With the tax burden already at a 70-year high, we need to be extremely careful about increasing the challenge facing businesses and households.’
Shadow chancellor Rachel Reeves told the chancellor to save £50billion with a higher tax on gas and oil firms’ ‘profits of war’ instead of ‘putting all that burden on ordinary working people’ coping with the highest inflation for 40 years.
MORE : When will Jeremy Hunt be announcing the budget as it gets delayed?
MORE : Rishi says he will be a ‘Santa not Scrooge’ with new Budget statement
Get in touch with our news team by emailing us at webnews@metro.co.uk.
For more stories like this, check our news page.
