UK budget: Hunt’s balancing act | tagesschau.de

After the Truss government was overthrown over fanciful fiscal plans, Britain waited to see how the new government would tackle budget problems. Treasury Secretary Hunt tries a balancing act.

It’s the details the UK has been waiting for. The Finance Minister must consolidate the budget – and his plans now presented include a total of 55 billion pounds, which is almost 63 billion euros. There are no easy answers, said Jeremy Hunt.

He had to make a trade-off between raising taxes and cutting spending. The government’s financial planning now envisages receiving about half more revenue from a tax increase and about half saving on expenses.

Hunt defended his austerity package in the House of Commons and promised stability and growth. And yet the state should not be weakened.

A Tory increases income tax

The British government wants to lower the threshold above which Britons should pay the maximum rate of income tax. In the future, the top tax rate will be due from around 125,000 pounds. Tax allowances are frozen.

Hunt also announced that the excess profit tax for oil and gas companies would be increased from 25 percent to 35 percent, and there would be a new tax for electricity producers. In addition, an announced reduction in land transfer tax will no longer apply.

The British government wants to achieve savings in numerous areas – but stretched out over the next few years. The government-set cap on gas and electricity bills is set to rise – for average households it will rise from £2,000 to £3,000 from April. However, it is also extended by one year.

Hunt apparently shied away from further hard, immediately effective cuts. Civil servants and employees in the healthcare sector in particular must reckon with lower salary increases.

Recession “Made in Russia”

The finance minister confirmed for the first time that the UK was in recession. The economy will shrink by 1.4 percent in 2023. However, Hunt repeatedly emphasized that the reasons for this – as well as for the high inflation of over eleven percent – are to be found internationally and not in Brexit.

Hunt relied on composure – Great Britain has already dealt with major problems, but is not immune to global economic developments. He described it as follows: “There is a ‘made in Russia’ recession, but there is also a ‘made in Britain’ recovery.”

Other G7 countries are doing better

This statement caused laughter, especially among many members of the opposition. Labour’s fiscal policy spokeswoman Rachel Reeves calculated that the economic outlook for the UK was miserable compared to the other G7 countries.

At the next elections, many would ask themselves: will I and my family be better off with this conservative government?

And the answer is: no.