Jeremy Hunt will announce today the biggest package of tax rises and spending cuts for more than a decade.
The chancellor is due to address MPs at 11.30am with details of a £54 billion package to fill a hole in the public finances. He will say in his autumn budget that the wealthiest must bear the “heaviest load” as he unveils £30 billion worth of spending cuts and £24 billion in tax rises over the next five years.
He will announce a series of “stealth” raids on income tax, national insurance, pensions savings, inheritance tax and VAT, under which middle-income families will pay thousands more in tax by 2028. Hunt will reduce the level at which people pay the 45p rate of income tax from £150,000 to £125,000, pulling 250,000 people into the top rate, costing them £580 a year.
Local authorities will be allowed to increase council tax by 5 per cent without a local referendum. Energy companies will face an extension of the windfall tax on “excessive” profits, which will raise up to £45 billion over six years.
The chancellor will pledge to “protect the vulnerable, because to be British is to be compassionate”. He is expected to confirm that benefits will rise in April in line with inflation and he will protect the triple lock for pensioners. Those on means-tested benefits, disability benefits and pensioner households will be given cost of living payments worth up to £1,100. However, the energy price guarantee, which limits household bills, will rise from an average of £2,500 to £3,000.
Most of the spending cuts will be pencilled in for after the next election in the hope that they can be cancelled if economic conditions improve.
Hunt is expected to say: “The British people are tough, inventive, and resourceful. We have risen to bigger challenges before. We aren’t immune to these global headwinds, but with this plan for stability, growth and public services we will face into the storm.”
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Jeremy Hunt to announce largest tax rises in a decade targeting wealthy with stealth taxes