Ministers are determined to clamp down on an ‘outrageous’ waste of public money while seeking billions of dollars in tax hikes and savings, as the Chancellor has warned he will play Scrooge in the next budget fall.
Jeremy Hunt has promised a ‘bunny-free’ statement emphasizing ‘certainty’ for families and businesses following the market turmoil caused by the £45billion tax cut windfall from his predecessor.
He is believed to be considering a range of options to address a so-called black hole in public finances, including a prolonged freeze on income tax and national insurance thresholds.
But while Mr Hunt warned there would be ‘horrendous decisions’ on taxes and spending ahead, the Chief Treasury Secretary said ministers would also seek to save money by ‘cutting waste’ .
John Glen said the government could be made ‘more efficient’ by speeding up the sale of underused buildings, particularly ‘expensive central London properties’, and ‘turbo-charging’ plans to digitize public services .
Writing in the Sunday Telegraph, he said: “To keep delivering the things people care about in the face of inflationary pressures, without making the problem worse by extra spending at all levels, we need to make tough decisions and make government more efficient. It means eliminating waste.
“It is outrageous that public money – your money – is being sucked into the system when it could be funneled into areas that really need it.”
Insisting that the British public wants the Tories to be trusted rather than ‘popular’, Mr Hunt said the hope for the coming week was to show the Government had a plan to stabilize the economy .
In an interview with The Sunday Times, he said the “tragedy” of Trussonomics was that the former prime minister and his chancellor had the foresight to drive growth.
But he said it was a “mistake” to act without showing “that we can pay our way as a country”, adding that he will “put people before ideology”.
The disastrous mini-budget may have cost the country up to £30billion, according to the Resolution Foundation, potentially doubling the task at hand for the Chancellor as he seeks up to £60billion of savings and additional income.
Think tank economists estimate that Liz Truss and Kwasi Kwarteng have spent £20billion on unfunded cuts to National Insurance and stamp duty, with a further £10billion lost as interest rates rise interest and government borrowing costs, the Observer reported.
Mr Hunt has suggested he won’t be pulling any rabbits out of the hat when he delivers his statement next week, unlike his predecessor – who slashed the top income tax rate drastically during his unfortunate ‘tax event’ .
“I think it’s fair to say that this will be the first bunny-free budget in many, many years,” he said.
“I’m sorry to disappoint but no, it won’t be the time for the bunnies, I’m afraid.”
He warned that people can expect ‘very awful decisions’ in an attempt to ‘get us back to where we are the fantasy land we all want to be’.
“I’m Scrooge going to do things so Christmas never gets cancelled,” he said.
Mr Hunt said he thought an official recession was “likely” after GDP fell 0.2% between July and September.
“The question is not really whether we are in a recession, but what we can do to make it shorter and shallower,” he added.
He insisted the “first thing” he could do on Thursday was to help tackle skyrocketing inflation.
“If we, together with the Bank of England, can control inflation, then we can contain the global rise in interest rates, contain the mortgage rate hikes that people are seeing, contain the cost of loans that businesses borrow and have a chance to get back on track,” he said.
“But that stability is what was missing, mainly thanks to (Vladimir) Putin’s invasion of Ukraine. This is a “made in Russia” recession and we must restore this stability as the first step towards growth.
He also advocated for “honest money” and “honest politicians”.
“For conservatives, we all understand that a prosperous economy, a vibrant economy, must have low taxes and a sound currency,” he said.
“But money has to come first and, you know, Margaret Thatcher said there’s nothing moral about spending money you don’t have.”
In a sign of what is to come on Thursday, Mr Hunt said ‘those with the broadest shoulders will bear the heaviest burden’.
It is understood that a reduction in the threshold at which the highest earners start paying the highest rate of tax is among the options on the table.
But he said a wider cohort will eventually be hit by rising energy costs as the government cannot afford to cut the sting of its bills indefinitely.
“We have to be honest with people – you can’t subsidize people’s energy bills indefinitely,” he said.
The Sunday Times said average costs are expected to rise for most households when the initial phase of the energy price guarantee ends in the spring – with the scheme being extended for another six months with just a third of previous funding.
But he suggested the Chancellor was considering a package of support measures to protect the most vulnerable, including pensioners and benefit recipients, from April.
A Treasury spokeswoman said: “Our number one priority is economic stability and restoring confidence that the UK is a country that pays its own way.
“The Chancellor will set out a plan to see debt fall as part of the November 17 Autumn Statement, alongside a full OBR forecast.
“The Prime Minister and the Chancellor have made it clear that this will require tough decisions, but protecting public services and the most vulnerable will be a priority.”
The ministry declined to comment on “speculation” around tax changes outside of tax events.