Jeremy Hunt will announce today the biggest package of tax increases and spending cuts in more than a decade.
The chancellor will address MPs at 11:30am with details of a £54bn package to fill a hole in public finances. He will say in his autumn budget that the richest should bear the “heaviest burden” by unveiling £30bn worth of spending cuts and £24bn in tax increases over the next five years.
He will announce a series of “stealthy” forays into income tax, national insurance, pension savings, inheritance tax and VAT, under which middle-income families will pay thousands more in taxes by 2028. Hunt will reduce the level at which people pay the 45p income tax rate from £150,000 to £125,000, bringing 250,000 people to the top rate, costing them £580 a year.
Local authorities will be able to increase the council tax by 5 percent without a local referendum. Energy companies will face an extension of the windfall tax on “excess” profits, which will raise up to £45bn over six years.
The chancellor will pledge to “protect the vulnerable, because to be British is to be compassionate.” She is expected to confirm that benefits will rise in April in line with inflation and protect the triple lock for retirees. Those on means-tested benefits, disability benefits and retirement homes will be given cost-of-living payments worth up to £1,100. However, the energy price guarantee, which limits household bills, will increase from an average of £2,500 to £3,000.
Most of the spending cuts will be made after the next election in the hope that they can be canceled if economic conditions improve.
Hunt is expected to say: “The British people are tough, inventive and resourceful. We have faced bigger challenges before. We are not immune to these global headwinds, but with this plan for stability, growth and public services we will weather the storm.”