TAXING TIMES
EVERYONE will have to pay "a bit more tax" and make "sacrifices", the Chancellor has revealed ahead of his first budget on Thursday.
Jeremy Hunt said that difficult economic times mean the government will "ask everyone for sacrifices", but he said that people on low incomes "only have so much to give."
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Mr Hunt spoke of "difficult choices" but emphasised that any plan would show "compassion and support for the most vulnerable".
On this, he told the BBC: "This is a government that is committed to helping people with the greatest difficulties and committed to our public services."
Mr Hunt is set to unveil his budget on Thursday in his Autumn Statement, after reportedly finalising it with the PM on last Friday.
The budget will lay out how the Treasury plans to fill an estimated £50bn black hole in public finances.
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It will include a range of tax rises and spending cuts, which the Chancellor says are essential for balancing the books and clamping down on inflation.
It is widely expected that following weeks of heated debate in Westminster, the pension triple lock WILL stay in place.
In a potentially major win for hard-up Brits, it’s also likely that benefits WILL be uprated in line with inflation.
But Treasury sources say the Chancellor has had to “think the unthinkable” to balance the books, and a bundle of tax hikes are on the way.
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For one, Mr Hunt is considering extending a freeze on income tax thresholds until 2028 – dragging millions more into a higher rate of tax.
The freeze was originally supposed to end in 2026.
By extending it, Brits who earn over £50,000 a year could end up paying £3,659 more in tax overall.
Challenged on the details of tax and spending measures, he replied: "We do have to do some tax rises and spending cuts to show that we are a country who can pay our way."
He added that this would be part of a plan to "bring down debt responsibly over time" and make sure that any recession was as "short and shallow" as possible.
He also announced that he would "reveal a plan to hold down rises in energy prices".
When asked if this would be a new plan, replacing the existing energy price guarantee, he explained that the cost of the current energy bill support is like the economy "supporting a second NHS", and implied that support would not be "uncapped or unlimited".
However, he did say energy support was one of the things previous PM Liz Truss and her Chancellor Kwasi Kwarteng "got absolutely right".
Discussing the prospect of nurse strikes, he recognised that doctors and nurses are under "unbearable pressure" and that the health service is in a "very tricky situation".
Addressing NHS union's pay demands, he said: "If we gave everyone inflation-proof pay rises, inflation would stay.
"The way through this is to bring down inflation."
In a later interview with Laura Kuenssberg, though, he refused to rule out a decline in the quality of public services in the short-term.
However, he emphasised that economic growth may be hindered by the "big increase in the number of people not taking part in work, even though they perhaps could".
Despite this, the Chancellor did admit that "we will all be paying a bit more tax", adding: "I'm not going to be hiding anything I do."
Explaining this he said: "Conservatives know that a thriving and dynamic economy needs low taxes and sound money - but sound money has to come first."
The Chancellor recognised that there would be economic pain but said: "we don't have the option of doing nothing."
He explained that if the government did nothing then it would force the Bank of England to raise interest rates, which would hit people's pockets "just as insidiously as taxes".
He also said that he will "talk about" defence spending in the statement, adding that "it's really important".
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Overall, he said it is "not just bad news", stating he wants to set out a plan to "show the way through" the difficult circumstances facing the UK.
He added: "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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