Britain’s Hunt says he needs to raise taxes to get the economy back on track

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LONDON — Britain’s Finance Minister Jeremy Hunt has said he will have to raise taxes in next week’s budget plan to clean up public finances and ease a potentially long recession, a newspaper said on Saturday. quoting.

Hunt has been trying to restore Britain’s credibility with investors in the first budget plan since Rishi Sunak replaced Liz Truss as prime minister last month by promising to fix its economic policy mistakes, mainly a series of cuts unfunded taxes.

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Truss’ “mini-budget” in September triggered a bond market meltdown that sent borrowing costs skyrocketing and eventually forced her to resign.

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“It is going to be a great moment of choice for the country and we will put people before ideology,” Hunt told The Sunday Times in an interview.

“You’re going to have a Conservative chancellor raising taxes which, you know, goes against the very reason he entered politics,” he said, adding, “you have to do what is good for the country and the situation we find ourselves in and, unfortunately, that means tax increases.

Along with further spending cuts, Hunt and Sunak are trying to prepare their Conservative party for tax increases that could reignite tensions within the party that ousted Truss and enabled Sunak to become Britain’s fourth Conservative prime minister since 2016.

The newspaper said Hunt planned to tackle a £55bn ($65.1bn) hole in the UK budget by freezing thresholds and allowances on income tax, national insurance , inheritance tax and pensions for two more years.

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It also intended to halve the non-taxable allowance for capital gains tax and lower the threshold for paying the additional rate of income tax to £125,000 a year from £150,000 books, said the Sunday Times.

“What I can promise people is that I will be honest about the scale of the problem and fair in how I approach these issues, and yes, that means people with the broadest shoulders will bear the brunt. heaviest burden,” he said. said.

Thursday’s budget plan will include forecasts similar to those of the Bank of England (BoE), which earlier this month warned of a long recession ahead.

“I think it’s very likely…the question isn’t really whether we’re in a recession, but what we can do to make it shorter and shallower,” Hunt said in the interview.

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Hunt said he would seek to work cooperatively with the BoE to control inflation and rising global interest rates, adding to strains on Britain’s economy.

“The first thing I can do is help the Bank of England bring inflation down,” he said, adding that he wanted to give businesses and households confidence to invest and spend. .

“If I can give them confidence that we have a plan to fight inflation, to bring stability to the economy, then…it will be done, as far as Thursday is concerned.”

The Times said Hunt would likely commit just £20billion to extending the government’s energy bill cap for another six months after April, a third of its estimated £60billion cost over its six months. first few months, which means bills are expected to increase.

But Hunt was also considering a multi-billion pound support package to protect pensioners and benefit recipients from higher electricity bills, the newspaper said.

($1 = 0.8450 pounds) (Writing by William Schomberg; editing by Andrew Cawthorne)


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