The Chancellor today has revealed the contents of his highly-anticipated financial budget, only one day after inflation in the UK reached 11.1% - but with the OBR (Office for Budget Responsibility) now claiming the country has entered a recession, are the government’s measures enough?
Jeremy Hunt, who has been Chancellor since October 14th, has taken a significantly different approach to Liz Truss’s government in terms of taxing the highest earners in society, stating: “We ask more to contribute more,” recognising how it is “families, pensioners, businesses, teachers, nurses and many others,” who are suffering the most from this cost-of-living crisis.
One of the Chancellor’s key announcements was the decision to increase the windfall tax on energy companies from 25% to 35%, from January 1st until March 2028, to address the issue of these companies earning astronomical windfall profits, resulting from Putin’s illegal invasion of Ukraine.
“I have no objection to windfall taxes,” Mr Hunt explained, but went on to say that “any such tax should be temporary, not deter investment, and recognize the cyclical nature of energy businesses.”
The 45p tax rate was also something the Chancellor addressed, lowering the threshold for this tax bracket from £150,000 down to £125,140, admitting it was a “difficult decision” after Liz Truss and Kwasi Kwarteng tried to abolish the 45p tax rate entirely in September.
Mr Hunt expressed how his priorities for the country are “stability, growth and public services,” a statement that received mixed reactions in the Commons after what has been an unprecedented few months for the public sector, with many NHS workers needing to go to food banks to keep their families above water.
However, the Chancellor has announced £3.3 billion more funding for the NHS over the next two years, along with allocating an extra £4.6 billion in school funding over the following two years in an attempt to repair the UK’s public sector considered by many to be on its knees.
“Being pro-education is being pro-growth, but providing our children with a good education is not just an economic mission - it’s a moral mission,” Jeremy Hunt stressed.
The Chancellor has also pledged that benefits, including Universal Credit, will rise with inflation, a promise that was written in the 2019 Conservative Manifesto, demonstrating how Rishi Sunak’s government is remaining faithful to the mandate given to the Conservatives in the latest General Election.
Hunt’s Budget announcements were not without opposition, as Shadow Chancellor Rachel Reeves accused the government of worsening the country’s situation on their own accord, claiming: “The mess we are in is the result of 12 weeks of Conservative chaos, but also 12 years of Conservative failure.”
She went on to challenge Mr Hunt: “What does the Chancellor have to offer today? More of the same, with working people paying the price for his failure. The Chancellor should have come here today to ask for forgiveness - at the very least, he could have offered an apology.”
The benefits and hindrances of the Chancellor’s Budget will be seen in the coming weeks and months, but with the mounting pressure of inflation on household finances across the country, many families remain just as worried for the winter ahead.