The Chancellor has confirmed the autumn budget will include “some tax rises” for working people, alongside a number of “spending cuts” in a bid to plug a “black hole” in public funds. It will be announced by Jeremy Hunt on November 17 and is described as an upgraded model of the delayed fiscal statement scheduled for the end of October. The Chancellor asserted the new policy would work towards securing long-term economic prosperity, but warned the UK could still face a “short and shallow” recession.
Speaking on Sky News, journalist Sophy Ridge asked: “There have been reports of a £55 billion black hole in public finances that you would want to try and shrink with a mixture of tax rises and spending cuts – is that correct?”
Mr Hunt replied: “We do have to do some tax rises and do some spending cuts if we are going to show that we are a country that pays our way.
“The reason for that is very simple. We were able to help businesses through the furlough scheme, we have been able to help people with their energy bills this winter and we will be able to do so next winter because we are being responsible with public finances.
“We are now in a situation where the world has changed very dramatically over the last year.”
The Chancellor referred to the furlough scheme granted during the coronavirus pandemic as a key contributor to the “black hole” in finances.
Additionally, Mr Hunt suggested government intervention to control spiraling energy costs had fueled government borrowing, which would now be plugged with tax rises and spending cuts.
He continued: “The plan we will outline will help us get through this in a way that will ensure this recession, if we are in a recession, is as short and shallow as possible.”
In light of a possible recession, the Chancellor asserted his autumn budget would help the UK “get through” financial difficulties and ensure the economy could “grow healthily” in the long-term.
The Chancellor suggested his autumn budget would give people across the UK “confidence” that the Government under Rishi Sunak would restore economic stability.
Read more: UK takes first step towards recession as economy shrinks
Asked if he would be paying more tax following the budget announcement, the Chancellor responded: “We are all going to be paying a bit more tax, I’m afraid.”
He did not give an indication as to which taxes would be increased in the autumn budget, although the universality of “all” people paying more tax suggests it could be income tax rates that rise.
Mr Hunt added: “It is not just going to be bad news. I think what people will recognize is if you want to give confidence for the future, you have to be honest about the present and you have to have a plan.
“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.”
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