Can Jeremy Hunt fix the UK economy? Strictly Business debate

Chancellor Jeremy Hunt donned his hairshirt for his fall statement and presented a tax and spending plan designed to curb inflation and restore stability.

However, the big question as Britain slides into recession is whether Hunt can save the UK economy and get it going again? Ruth Sunderland and Alex Brummer debate that on the Strictly Business show.

At the heart of Jeremy Hunt’s package were savage tax hikes for corporations and ordinary working citizens.

Middle-income taxpayers are particularly hard hit by an extension of the tax deduction freeze until 2027-28. This measure will drag millions of people into higher tax brackets in a process known as “fiscal drag.”

As a result, taxes as a percentage of national output will rise in the coming years to 37.1 percent of national output, what the independent observer, the Office for Budget Responsibility (OBR), describes as the longest “sustained” period of high taxes. since World War II.

While the Chancellor tried to portray his measures as pro-growth, backing major capital programs such as £700m for a new nuclear power project at Sizewell C in Suffolk, he was equally distant from Liz Truss’s plans for a supply chain side, tax reduction agenda because it is possible to travel.

By poking fun at companies with higher taxes, with energy companies and electricity producers hardest hit, he’s betting that companies value calmer markets more than incentives to invest.

There is a real risk that the combination of higher taxes and the Bank of England’s rate hikes will lead to a deeper and longer recession than makes sense in the current turbulent global environment with war raging in the heart of Europe.

In the recent past, the OBR’s forecasts have often been off track and faster-than-expected output has led to higher tax revenues, creating unexpected room for the Treasury.

This time around, the OBR’s forecasts for the economy are more optimistic than the Bank of England’s, predicting a one-year recession by the Bank’s two-year run, with a recovery starting in the closing months of 2023.

Nevertheless, the high cost of the energy price guarantee, extended until next winter with a higher cap of £3,000, plus an increase in state pensions and most benefits in line with inflation, will see borrowing rise to an eye-watering £177bn in 2022-23.

Hunt tried to wink at Britain’s brilliant research universities and innovation with a promise to maintain research and development tax breaks that seemed under threat.

By deciding to bet on the restoration of stability over everything else combined, Rishi Sunak and Jeremy Hunt have overcooked the tax shock for ordinary people. They also stifle entrepreneurship and entrepreneurship by pushing hard on capital gains taxes.

Hunt’s was a financial statement based on Treasury orthodoxy that might as well have been delivered by a Labor chancellor.