Rishi Sunak and Jeremy Hunt eyeing ‘rough’ tax rises across the board to help plug fiscal ‘black hole’
The autumn statement this month will likely encompass “rough” tax rises as the Treasury seeks to fill a multi-billion “black hole” in the nation’s finances, Sky News has been told.
The warning from a source in the Treasury comes after Chancellor Jeremy Hunt and Prime Minister Rishi Sunak met yesterday morning.
They discussed what is being characterised as an eye-watering black hole, and agreed that tough decisions will be needed on tax rises as well as spending.
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The tax rises are likely to be across the board, although the pair agreed those with the “broadest shoulders” should bear the greatest burden, it is understood.
The source said: “It is going to be rough. The truth is that everybody will need to contribute more in tax if we are to maintain public services.
“After borrowing hundreds of billions of pounds through COVID-19 and implementing massive energy bills support, we won’t be able to fill the fiscal black hole through spending cuts alone.”
The source did not put a figure on the “black hole”, but the Resolution Foundation thinktank have estimated at least £40bn will need to be found as part of the fall-out from Liz Truss’s disastrous mini-budget and warned tax rises are “likely” to come soon.
Mr Hunt will set out his plans in the Autumn Statement on 17 November and is reportedly considering splitting the burden equally between tax rises and spending cuts.
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Few concrete details have emerged but, according to The Times, public sector workers could face deep real-terms cuts to wages, with The Treasury reportedly looking at an increase of 2% across the board for 2023-24, at a time when inflation is expected to be well above that threshold.
A Treasury source told the PA news agency that “no decisions have been taken” and the “independent pay review body process takes place next year”.
With BP unveiling profits that doubled to more than £7.1bn in the three months to September, pressure is continuing to mount for an enhanced windfall tax on oil and gas giants to help fill the Treasury coffers.
COP26 president Alok Sharma, who was demoted from the cabinet by Mr Sunak, has backed this move, saying: “We need to raise more money from a windfall tax on oil and gas companies and actively encourage them to invest in renewables.”
Rishi Sunak told his Cabinet on Tuesday that the NHS would be “prioritised” as difficult decisions are taken on spending, No 10 said.
A recession next year could be predicted by the government’s independent forecaster the Office for Budget Responsibility, the Resolution Foundation said, and GDP forecasts could be cut by up to 4% by the end of 2024.
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Among the “menu” of options open to the chancellor are cuts to investment spending, a move the Resolution Foundation said could save £10bn but would also have a detrimental impact on growth.
The thinktank also suggests the government could try to choose the so-called “austerity option” – but this would require cuts to already-squeezed department budgets.
Meanwhile, £9bn could be saved by choosing not to raise benefits and pensions in line with rising prices next year, but any such move would have a “huge” impact on those already struggling to make ends meet.
Another option would be to re-instate the health and social care levy to raise £15bn by 2026-2027, while around £2bn could be raised by extending the “stealth” freezes in income tax threshold by a further year to 2026-2027.
A Romanian grooming gang has been convicted of sexually exploiting 10 vulnerable women in Dundee.
Four men and one woman were found guilty of dozens of offences – including rape – following an extensive investigation into sexual exploitation, human trafficking, and the supply of drugs in the Tayside area.
Marian Cumpanasoiu, 37, Remus Stan, 34, Catalin Dobre, 44, Cristian Urlateanu, 41, and Alexandra Bugonea, 34, denied any wrongdoing but on Thursday were convicted following a trial at the High Court in Glasgow.
Detective Inspector Scott Carswell branded the offenders “deplorable” in an interview with Sky News’ Scotland correspondent, Connor Gillies.
The detective said the gang plied the women with alcohol and free Class A drugs at parties before coercing them into sexual activity, “which a lot of them didn’t want to do”.
He said: “But as things progressed, they were so addicted to the drugs that they knew the only way they could get the drugs was to perform the sexual acts that they were having to get involved in.”
Detective Inspector Scott Carswell
DI Carswell said the gang got the women addicted to drugs in a bid to control them and keep them coming back for more.
He added: “They’ve had no thought as to the impact this is having on the victims. It’s been quite controlled in that they knew what they were doing.”
The gang will be sentenced at a later date.
Police Scotland said the offenders were arrested and charged as part of Operation Recloir, which was launched in late 2021 to target a gang of suspected human traffickers in the Tayside area.
DI Carswell said the inquiry initially focused on brothel-keeping in Dundee and the suspected trafficking of Romanian females into the country.
He added: “However, into the summer of 2022 we started to receive information that the crime group were targeting vulnerable Dundee females, and it looked like they were grooming them and coercing them with gifts of free drugs and other things until it moved on to the victims having to get involved in sexual activity to get the free drugs.
“And unfortunately, this got them addicted to the class A drugs that had been provided.”
DI Carswell said many of the victims identified believed they were the girlfriends of the men involved and did not realise they were being “groomed and used”.
The detective said the women were looking to be “cared for”, noting: “However, I believe that the end goal here was to groom the females and possibly move them into prostitution.”
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DI Carswell said it was important to build up the victims’ “trust and confidence” in order to get them to engage with the force.
He said: “That did take a lot of patience, and it was something that I was passionate about with my inquiry team from the start.”
DI Carswell added work remains ongoing to ensure the women’s welfare and long-term safeguarding.
The detective believes his team identified all the victims, but not everyone wished to engage with the inquiry.
DI Carswell added: “What I would say to them is even at this time if they don’t want to engage with the police, the support’s always there if they need help with anything on the back of this.”
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