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Britain's Jeremy Hunt walks down Downing Street in London
LONDON (Reuters) - British Finance Minister Jeremy Hunt on Thursday announced a series of tax rises and tougher public spending in a tough budget plan he says is needed to repair the country's public finances. He also revealed that the economy is expected to shrink by 1.4% in 2023.
Below are the main quotes:
ABOUT THE CHALLENGE AHEAD:
“Today we present a plan to address the cost of living crisis and rebuild our economy. Our priorities are stability, growth and public services. We also protect the vulnerable because to be British is to be compassionate and this is a compassionate Conservative government.”
AT THE BANK OF ENGLAND
“The Bank of England, which has done excellent work since its independence, now has my full support in its mission to defeat inflation and today I confirm that we will not change its mission.
“But we need fiscal and monetary policy to work together – and that means the government and the Bank are working in sync. It means, in particular, giving the world confidence in our ability to pay our debts.”
ABOUT INFLATION FORECASTS
“The OBR forecasts the UK inflation rate to be 9.1% this year and 7.4% next year. They confirm that our actions today help inflation fall sharply from the middle of next year. They also judge that the UK, like other countries, is now in recession.”
ABOUT GROWTH/UNEMPLOYMENT/DEBT FORECASTS
“Overall, this year, the economy is still expected to grow by 4.2%. GDP falls in 2023 by 1.4%, before rising by 1.3%, 2.6% and 2.7% in the following three years. The OBR says higher energy prices explain most of the downward revision in cumulative growth since March. They also expect unemployment to rise from 3.6% today to 4.9% in 2024, before falling to 4.1%.”
“They also expect unemployment to rise from 3.6% today to 4.9% in 2024, before falling to 4.1%.”
“Today’s decisions mean that over the next five years, borrowing will be more than halved. This year we are forecast to borrow 7.1% of GDP or £177 billion; next year, 5.5% of GDP or 140 billion pounds; then, by 2027-28, it drops to 2.4% of GDP or £69 billion.
“As a result, underlying debt as a percentage of GDP begins to fall from a peak of 97.6% of GDP in 2025-26 to 97.3% in 2027-28.”
ABOUT THE NEW TAX RULES
“I also confirm two new fiscal rules: the first is that underlying debt must fall as a percentage of GDP in the fifth year of a rolling five-year period. The second, that public sector debt, in the same period, must be less than 3% of GDP. The plan I announce today meets both of those rules.”
ABOUT TAX INCREASES
“Asking more from those who have more means the first difficult decision I make about tax is to reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140. Those earning £150,000 or more will pay just over £1,200 extra a year.”
“I am maintaining at current levels the personal income tax allowance, higher rate threshold, main national insurance thresholds and inheritance tax thresholds for a further two years, taking us until April 2028.”
“The dividend allowance will be reduced from £2,000 to £1,000 next year and then to £500 from April 2024. The annual amount exempt from capital gains tax will be reduced from £12,300 to £6,000 next year and then to £3,000 from April 2024.”
ABOUT FANTASTIC TAXES
“From January 1 to March 2028, we will increase the energy profit rate from 25% to 35%.
“The structure of our energy market also creates windfall profits for low-carbon electricity generation, so from January 1st we have also decided to introduce a new temporary tax of 45% on electricity generators. Together these taxes raise £14 billion next year. “
ON DEFENSE SPENDING/EXTERNAL AID BUDGET
“We will continue to maintain the defense budget at at least 2% of GDP to be consistent with our commitment to NATO.
“OBR forecasts show a significant shock to public finances, meaning it will not be possible to return to the 0.7% target until the fiscal situation allows. We remain fully committed to the target and the plans I have set out today assume that ODA spending will remain at around 0.5% for the forecast period.”
IN POWER PLANS
“By 2030, we want to reduce the energy consumption of buildings and industry by 15%. Reducing demand by this much means, at today's prices, a saving of £28 billion on our national energy bill or £450 on the average household bill.
“In this Parliament, we are already planning to invest a total of £6.6 billion in energy efficiency. Today, I announce new funding, from 2025, of a further £6 billion – doubling our annual investment to deliver this new national ambition.”
“From April, we will continue the Energy Price Guarantee for a further 12 months at a higher level of £3,000 per year for the average household. for every house.”
PENSION/BENEFITS SUPPORT
“I also commit to increasing these benefits by inflation with an increase of 10.1%. It's an expensive £11 billion commitment.
“To support the poorest pensioners, I have decided to increase the pension credit by 10.1%, which is worth up to £1,470 for a couple and £960 for a single pensioner in our most vulnerable families.”
ABOUT EDUCATION
“I can announce today that next year and the year after that, we will invest an extra £2.3 billion a year in our schools.”
