UK’s Hunt seeks budget plan to make recession short, shallow

Bloomberg

The UK’s new financial plan will seek to make any recession as short as possible, Chancellor
Jeremy Hunt said.
“I want to make sure that this recession, if we are in one, is as short and shallow as possible,” Hunt said in an interview on Sky News.
The UK economy shrinks in the third quarter for the first time since the first quarter of 2021. That means Britain is the only Group of Seven economy that has yet to fully recover from the pandemic.
Hunt will announce his plan on November 17 as he seeks to plug a budget shortfall estimated at more than £50 billion ($59 billion). Reports that
he will raise revenue from income tax, implement windfall charges on energy companies and put levies on inheritance have sparked panic in the
Conservative Party.
Speaking to the BBC, Hunt signaled the government would likely extend measures to protect households from soaring gas and electricity bills, but that “there has to be some constraints” on the level of future aid once the current support plan ends in April.
In August, the government introduced an energy price cap intended to ensure that the average household will pay no more than £2,500 annually. The cap was initially planned to last two years but later shortened.
Hunt is expected to extend the scheme for another six months beyond April at a cost of £20 billion, about a third of the amount allocated for a six-month period in the current package, the Times of London reported.

Cutting spending and raising taxes are necessary to tame inflation and control rising government debt, the chancellor told Sky News. The bulk of the tax measures would fall on those with “the broadest shoulders,” while Hunt declined to define just who that would include.

“We’re all going to be paying a bit more tax, I’m afraid,” Hunt said. “But I think in a fair society, as we are in the UK, we need to recognize that there’s only so much you can ask for people on the very lowest income. So that will be reflected in the decisions that I take.”

Hunt is set to extend a freeze on income tax thresholds and allowances, raising about £5 billion a year by 2027-28, the Financial Times reported. A plan to raise the top rate of income tax or lower the threshold at which the tax bracket starts is also being considered, according to the Telegraph.