Chancellor Jeremy Hunt will make "difficult decisions" when he delivers Thursday's Autumn Budget statement, the government has said. Hunt, the third Conservative Chancellor in three months, is bidding to balance the books and stabilise the economy after weeks of market turmoil under Liz Truss and inflation hitting a 41-year high of 11.1 per cent in October.
Mr Hunt is expected to raise funds by imposing a number of stealth taxes, such as by extending a freeze on the rates at which workers begin paying higher income tax. It is understood he could also lower the threshold for when the 45 per cent top rate of income tax comes in - a move that would line up with his vision of "those with the broadest shoulders bearing the heaviest load".
The chancellor is expected to allow local authorities to further raise council tax without referendums and delay Boris Johnson’s lifetime cap on social care costs. Mr Hunt will also be setting out whether benefits and state pensions will rise in line with inflation and what will happen with energy bill support when the Energy Price Guarantee comes to an end in March.
The government has tonight published a preview of the chancellor's long-awaited speech. In his statement to MPs on Thursday morning, the chancellor is expected to say that his plan for the economy "reflects British values", the government said, adding that it aims to "deliver strong public finances and help keep mortgage rates low". He will say that the plan also protects the vulnerable "because to be British is to be compassionate".
“There is a global energy crisis, a global inflation crisis and a global economic crisis," the statement will add. "But the British people are tough, inventive, and resourceful. We have risen to bigger challenges before. We aren’t immune to these global headwinds, but with this plan for stability, growth and public services - we will face into the storm”.
Mr Hunt will warn that “high inflation is the enemy of stability” as it sends food and fuel bills soaring, causes businesses to fail and raises unemployment. “It erodes savings, causes industrial unrest, and cuts funding for public services. It hurts the poorest the most and eats away at the trust upon which a strong society is built,” he is set to say.
“Families across Britain make sacrifices every day to live within their means, and so too must governments because the United Kingdom will always pay its way. We are taking a balanced path to stability: tackling the inflation that eats away at a pensioner’s savings and increases the cost of mortgages to families, at the same time supporting the economy to recover. But it depends on taking difficult decisions now.”
Prime Minister Rishi Sunak has warned that inflation is the “enemy we need to face down” but insisted the decisions in Thursday’s statement would be “based on fairness, they will be based on compassion”.
Labour has warned that Britain is “falling behind on the global stage”. Shadow chancellor Rachel Reeves said: “The country is being held back by 12 years of Tory economic failure and wasted opportunities and working people are paying the price. What Britain needs in the Autumn Statement are fairer choices for working people, and a proper plan for growth.”
Independent forecasts from the Office for Budget Responsibility (OBR) will also be published on Thursday and are expected to detail bleak prospects for an economy teetering on a recession.
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