UK: Hunt Unveils New Spending Cuts, Tax Hikes

The United Kingdom’s Chancellor of the Exchequer Jeremy Hunt has unveiled a budget, featuring tens of billions in spending cuts and tax increases.

Hunt on Thursday delivered the plan to tackle the economy in a speech to the House of Commons, saying it prioritised “stability, growth and public services”.

He said more than half of the needed 55 billion pounds ($65bn) fiscal consolidation would come from cuts in spending.

“On tax, I have tried to be fair by following two broad principles: firstly, we ask those with more to contribute more; and secondly, we avoid the tax rises that most damage growth,” Hunt said.

He also reduced the threshold at which the 45 per cent personal income tax rate becomes payable from 150,000 pounds (about $178,500) to 125,140 pounds (about $148,900).

Those earning 150,000 pounds (about $178,500) or more will pay just more than 1,200 pounds (about $1,400) more a year.

He said; “I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds for a further two years taking us to April 2028.

“The dividend allowance will be cut from 2,000 pounds [about $2,400] to 1,000 pounds [about $1,200] next year and then to 500 pounds [about $600] from April 2024. The annual exempt amount for capital gains tax will be cut from 12,300 pounds [about $14,600] to 6,000 pounds [about $7,300] next year and then to 3,000 pounds [about $3,650] from April 2024.”

Hunt said the country’s health and social care system would receive an 8 billion pounds ($9.5bn) package within two years, which he said health chiefs had indicated would help fulfil key priorities.

He said he would increase the state-run National Health Service budget in each of the next two years by an extra 3.3 billion pounds ($3.9bn).

Hunt and Prime Minister Rishi Sunak, who replaced Truss as Conservative Party leader and prime minister last month, have reversed most of Truss’ policies while pledging that the government will pay its bills and start reducing debts built up over the past 15 years.