RISHI Sunak hopes to have a £7bn warchest to splurge before the next election – if his Chancellor’s brutal budget this week works.
The nation is bracing for Jeremy Hunt’s Autumn Statement which will slash £35 billion in public spending while hiking taxes to raise £25 billion.
Rishi Sunak hopes to have a £7bn warchest to splurge before the next election
But this will only be possible if his Jeremy Hunt’s brutal budget this week works
But Tory MPs have been told there is “hope on the horizon” provided Mr Hunt’s plan is a sucessful at slashing inflation by the middle of next year, while also filling a £55 billion blackhole in the nation’s coffers and shortening a predicted two year recession.
Writing in HOAR ahead of Thursday’s annoucement Mr Hunt warned: “I wish I could paint a better picture, or tell Sun on Sunday readers that everything will be fine. But I can’t do that.”
However he said he would protect the most vulnerable, and admitted for the first time the richest people and businesses will take the brunt.
He added: “While we cannot protect everyone, we will ask those with the broadest shoulders to carry a little more of the load.”
HOAR on Sunday can reveal he will increase the windfall tax on North Sea oil and gas producers – hiking the rate from 25 per cent to 35 per cent – raising £45 billion over the next five years.
He will also speed up a new international tax on profits of multinational companies that operate in multiple countries, which the OBR say could bring in around £2 billion.
The Chancellor is also set to announce a series of stealth taxes freezing thresholds and personal allowances on income tax, national insurance, VAT, inheritance tax and pensions for another two years.
He will also reduce the threshold for the 45p additional rate of income tax from £150,000 to £125,000.
Help to pay energy bills will also be extended beyond April, but Mr Hunt has committed just £20 billion to the scheme – a third of the current package – which will be targeted at the most vulnerable.
And he told the Sunday Times he did not want to end up “with an entire second NHS in terms of the cost of our energy bills” which will drag down growth.
But the minimum wage and national living wage will rise, although the exact raise has yet to be determined, the triple lock on pensions will stay and benefits will increase in line with inflation.
Treasury insiders warned not to expect ‘rabbits out of the hat’ adding: “If there was, it would be one that’s lost its eyes and all its teeth have fallen out.”
Some Tory MPs have been told by the OBR, the UK’s financial watchdog, that Mr Sunak will have between £5bn and £7bn in extra cash if their budget is successful at bringing down inflation from around ten per cent, to the Bank of England’s two per cent target next year.
One said: “If it all goes to plan Rishi will have £5bn to £7bn of fiscal headroom to use in an election war chest according to the OBR.”
But last night former business secretary Jacob Rees-Mogg warned Mr Hunt not to plan his budget around the influential watchdog’s advice.
He said: “The OBR makes horoscopes look respectable.
“It is very risky setting economic policy given the significant margin of error in their work most years.”
And ex Education Secretary Kit Malthouse also warned any cuts to school budgets next week would be a “disaster” for the country.
Another ex-minister told HOAR: “It looks to me as if it’s an over correction, boarding on panic, to correct what Liz Truss and Kwasi Kwarteng did.”
And writing in HOAR Labour’s Shadow Chancellor Rachel Reeves said tax hikes should not hit working people.
She said: “It seems every time taxes go up, it falls on you.
“I’d be doing everything in my power to avoid that happening next week.”
Last night Mr Hunt had a sly dig at Matt Hancock adding: “I think eating testicles in the jungle is literally the only job in the world that’s worse than mine.”
