Hunt promises to put Britain on the ‘hard road’ of recovery
Chancellor Jeremy Hunt has promised to use his budget on Wednesday to put Britain on the “hard road” to becoming one of Europe’s richest countries, but warned big tax cuts will have to wait.
Hunt is expected to use his limited fiscal space to offer tax breaks to encourage businesses to invest, while funding measures to get people back to work and ease the cost of living crisis.
The Chancellor said on Sunday there were “no easy solutions” to boosting the UK’s sluggish economic growth as he paved the way for a budget that eschewed big giveaways in favor of fiscal discipline and efforts to curb high inflation.
“I think we have fantastic opportunities in this country,” Hunt told the BBC. “It’s a tough road to get there, but we really can be one of the wealthiest countries in Europe, if not the world.”
Hunt said the business wanted stability and he was trying to repair the damage caused by Liz Truss’ chaotic tenure over the past year.
He said tax cuts are desirable but good management of public finances comes first. “Within the bounds of responsibility, we will always try to reduce the tax burden,” he added.
Hunt has told Conservative MPs to be patient and that once inflation has been tamed, tax cuts will be possible in the autumn and ahead of an election next year.
Government insiders confirmed Hunt will use his fiscal space in the budget to set up a business capital deduction scheme to replace the ‘super deduction’, a generous two-year £25bn investment stimulus scheme that is about to end.
With the corporate tax rate rising from 19 percent to 25 percent in April, Hunt is under pressure to show he has a growth plan.
In the short term, he will spend money on Tory policy priorities, including allocating an extra £5bn over two years to defense and a further £3bn to keep households’ energy bills down this spring.
Hunt will also try to deal with the NHS’ staff crisis by changing pension rules, which are blamed for preventing senior doctors from working into their 50s.
The annual pension savings limit will rise from £40,000 to £60,000 before tax charges and the lifetime allowance will rise from its current level of £1m.
Hunt is hoping NHS unions could agree a wage deal ahead of the budget that will end months of strikes to lift spirits in the country. Further talks between ministers and unions will take place this week.
The chancellor will be under pressure in the autumn to raise money to cover the cost of public sector collective agreements, which are expected to include one-off settlements for 2022-23 and more generous offers for 2023-24.
A major focus of the budget will be tackling inactivity in the workplace, including making childcare affordable for less affluent families and increasing incentives for the sick and disabled to find work.
Hunt will increase the amount parents can claim on Universal Credit for childcare, but acknowledged it would be “expensive” to extend the aid to working families who don’t receive the flagship benefit.
He will also announce that the number of children each carer can look after in daycare centers in England will be increased from four to five to bring them in line with their counterparts in Scotland.
People with universal credit are encouraged to work or increase their hours through benefit changes.
An element of coercion is applied, with applicants being encouraged to attend meetings with work coaches more regularly and attend training camps.
https://www.ft.com/content/c3186569-1150-44bd-9a25-8816ed3562e1 Hunt promises to put Britain on the ‘hard road’ of recovery