London, November 13 (QNA) – British finance minister Jeremy Hunt said he will have to raise taxes in next week’s budget plan in order to fix the public finances and soften a potentially long recession.
According to British newspaper ‘The Sunday Times’, Hunt is trying to restore Britain’s credibility among investors in its first budget plan since Rishi Sunak replaced Liz Truss as prime minister last month with a vow to undo her economic policy mistakes, chiefly a series of unfunded tax cuts.
Truss’s “mini-budget” in September set off a bond market slump that sent borrowing costs soaring and ultimately forced her to step down.
“This is going to be a big moment of choice for the country and we will put people ahead of ideology,” Hunt told the Sunday Times in an interview.
As well as more spending cuts, Hunt and Sunak are trying to prepare their Conservative Party for the tax increases which could reignite tensions in the party that forced out Truss and allowed Sunak to become Britain’s fourth Conservative prime minister since 2016.
The newspaper said Hunt planned to tackle a 55 billion-pound ($65.1 billion) hole in Britain’s budget by freezing thresholds and allowances on income tax, national insurance, inheritance tax and pensions for a further two years.
He also intended to halve a tax-free allowance for capital gains tax and lower the threshold for paying the additional rate of income tax to 125,000 pounds a year from 150,000 pounds, the Sunday Times said.
The next budget plan will include forecasts similar to those of the Bank of England, which warned earlier this month that the country faces a long recession ahead. (QNA)
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