Next two years will be ‘challenging’, says Chancellor Jeremy Hunt – as disposable incomes are set to fall to record lowest level
The UK’s economic outlook will be “challenging” for the next two years, Jeremy Hunt says.
The chancellor presented his autumn statement to parliament on Thursday, littered with stealth taxes and curbs on government spending amounting to £55bn in an attempt to plug the black hole in the public finances.
But the independent Office for Budget Responsibility (OBR) warned the disposable incomes of UK households would fall by 7.1% over the next two years – the lowest level since records began in 1956/7, and taking incomes down to 2013 levels.
Politics live: Tax burden reaches highest level since WWII
Speaking to Sky News, Mr Hunt said it was “a difficult time for everyone” but tax hikes and spending cuts are needed to get the economy “on an even keel”.
“Over the next two years it is going to be challenging,” he said.
“But I think people want a government that is taking difficult decisions, has a plan that will bring down inflation, stop those big rises in the cost of energy bills and the weekly shop, and at the same time is taking measures to get through this difficult period.”
The chancellor insisted that his autumn statement is a “very Conservative package” following criticism from some Tory MPs.
“The Office for Budgetary Responsibility said yesterday that what we’re doing is actually recession shallow, it’s saving jobs,” he said.
“But what I would say to my Conservative colleagues is there is nothing Conservative about spending money that you haven’t got, there is nothing Conservative about not tackling inflation, there is nothing Conservative about ducking difficult decisions that put the economy on track.
“And we’ve done all of those things and that is why this is a very Conservative package to make sure we sort out the economy.
“None of this is easy, but it’s the right thing to do.”
Former business secretary Jacob Rees-Mogg accused the chancellor of taking the “easy option” in Thursday’s autumn statement rather than bearing down harder on public spending.
He said the country needed lower taxes to drive up growth.
Please use Chrome browser for a more accessible video player
Hunt questioned over autumn statement
Probed on how it can be fair that pensions will go up by inflation when public sector workers will not see pay increase alongside prices, Mr Hunt said the elderly do not have the ability to work more to improve their take home pay.
“Well, I think the truth is, first of all, pensioners have retired. They don’t have the ability to work more or work longer hours in the way that people of working age do,” the chancellor said.
“But I think it is wrong to say that only the poorest pensioners are feeling the squeeze at the moment.
“I think this is something that’s affecting everyone and I think it’s right.
“Having made that promise to pensioners in our manifesto that we would have this triple lock, I think this is exactly the kind of tough time that people want it to kick in.
“And so that’s why I think it’s the right thing to do.”
The chancellor added: “We’re not pretending that this isn’t going to be a difficult time for everyone. But what we have is a plan.”
Please use Chrome browser for a more accessible video player
’12 weeks of Conservative chaos’ – Rachel Reeves
In yesterday’s autumn statement, Mr Hunt announced economic policies which the government hopes will help to rebalance the nation’s finances after the economic turmoil which followed former chancellor Kwasi Kwarteng’s mini-budget.
These included:
• Income tax thresholds being frozen for two more years until April 2028
• Top level of income tax now being paid on earnings over £125,140 instead of £150,000
• Pensions triple lock will remain – with pensioners to see a 10.1% increase in weekly payments in line with inflation
• Benefits to also rise in line with inflation – by 10.1%
• Energy cap to rise from £3,000 a year to £2,500 a year beyond April
• UK minimum wage to rise from £9.50 to £10.42 an hour for those aged over 23
• Windfall tax on oil giants’ profits to rise from 25% to 35% and be extended by two years until March 2028
• Additional cost of living payments of £900 for those on benefits and £300 for pensioners
• Spending on public services in England to rise slower than planned
Click to subscribe to the Sky News Daily wherever you get your podcasts
As a result of Mr Hunt’s announcements, the tax burden in the UK will also now be at its highest since the Second World War, and there are stark warnings about increased bills and higher unemployment as the recession takes hold – as well as predictions the economy will still shrink 1.4% in 2023.
But most of the difficult decisions on spending have been postponed until after the next general election, due in 2024.
Treasury analysis suggests around 55% of households will be worse off as a result of the measures.
Read more: Jeremy Hunt’s autumn statement had all the hallmarks of a Labour budget
Labour has blamed “12 weeks of Conservative chaos” and “12 years of Conservative economic failure” for the bleak outlook.
Shadow chancellor Rachel Reeves accused the government of forcing the UK economy into a “doom loop where low growth leads to higher taxes, lower investments and squeezed wages, with the running down of public services”.
Ms Reeves told Sky News she is “really worried about what’s going to happen to people’s living standards next year from April” and said a Labour government would have done more “to alleviate some of that pressure on the ordinary working person”.
Please use Chrome browser for a more accessible video player
What does the autumn statement mean?
As Mr Hunt took part in the broadcast round Friday morning, economic think-tank the Resolution Foundation published analysis suggesting his autumn statement’s tax rises would deliver a 3.7% income hit to typical households.
The foundation said the statement had piled further pressure on the “squeezed middle” and that the focus on “stealthy” tax threshold freezes to raise revenue would extend far beyond high earners.
The think tank also found that the budget would reverse much of the government’s levelling up agenda.
“The £15 billion of cuts to capital investment announced yesterday will undo 80% of the remaining increases in public investment announced by previous chancellor Rishi Sunak, which underpinned the levelling-up agenda,” it said.
UK
More than 500 people arrested after Palestine Action protest – with almost half aged 60 and above
The number of people arrested after a protest in London on Saturday supporting banned group Palestine Action has risen to 532, police have said.
Around half of them (259) were aged 60 and above – including almost 100 people who were in their 70s.
Some 522 arrests were for displaying a placard in support of a proscribed organisation contrary to Section 13 of the Terrorism Act 2000, according to the Metropolitan Police.
As of 9pm on Saturday, the number was put at 466.
Membership of, or support for, Palestine Action is a criminal offence punishable by up to 14 years in prison under the Terrorism Act.
A rally supporting Palestine Action in Parliament Square. Pic: Reuters
One of the arrests took place as the Palestine Coalition march formed in Russell Square, while 521 were at the protest in Parliament Square.
Of those arrested, the biggest number (147) was in the 60-69 age group, while 97 people were aged between 70 and 79, and 15 others were between 80-89.
Six were aged 17-19, sixty-five were in the 20-29 age group, 55 were aged 30-39, 45 were aged 40-49 and 89 were in the 50-59 age group.
The average age of those arrested was 54, while some 263 of those arrested were male, 261 were female and eight either defined themselves as non-binary or did not disclose their gender.
Among the arrests, six were for assaults on officers (none were seriously injured), one was for “obstructing a constable in the execution of his/her duty”, two were for breaching Section 14 Public Order Act conditions, and one was for a racially aggravated public order offence.
People attend the protest in central London. Pic: PA
Hundreds of people attended Saturday’s demonstration in Parliament Square, organised by Defend Our Juries, with the Metropolitan Police warning it would arrest anyone expressing support for Palestine Action.
Anyone who was arrested as part of the operation was taken to one of two prisoner processing points in the Westminster area.
Those whose details could be confirmed were released on bail to appear at a police station at a future date. They were given conditions not to attend future demonstrations related to Palestine Action.
Those who refused to provide their details at the prisoner processing points and those who were found to have been arrested while already on bail, were taken to one of a number of Met Police custody suites.
Read more from Sky News:
Four members of UK family die in Portugal crash
UK bracing for another heatwave
Charity Amnesty International described the mass arrests under UK terrorism law as “deeply concerning”.
The crowd, sat on the grass inside Parliament Square, could be seen writing “I oppose genocide, I support Palestine Action” on white placards at 1pm, with the vast majority remaining silent.
Meanwhile on Sunday, hundreds of people joined a march on Downing Street to urge the release of those being held in Gaza by Palestinian militant group Hamas.
A scuffle broke out after at least two men shouted “Free Palestine” in front of the march.
One man was seen being bundled to the ground close to Trafalgar Square after being surrounded by around a dozen people.
Another man was seen being moved away by police officers after he began shouting.
Amnesty International says it is “deeply concerning” that police made 474 arrests during a Palestine Action demonstration in London.
Metropolitan Police said 466 were detained under the Terrorism Act for showing support for a banned group.
Eight more people were arrested for other offences, including five for assaulting officers.
The Met said it was the most arrests it’s made related to a single operation in at least the past decade.
Pic: PA
Organiser of the event, Defend Our Juries, earlier said up to 700 people were at the event in Parliament Square and claimed police were preparing for the “largest mass arrest in their history”.
The group said those arrested included former Guantanamo Bay detainee Moazzam Begg, NHS workers, quakers and a blind wheelchair user.
Amnesty International UK’s chief executive Sacha Deshmukh said in a statement: “The protesters in Parliament Square were not inciting violence and it is entirely disproportionate to the point of absurdity to be treating them as terrorists.
“Instead of criminalising peaceful demonstrators, the government should be focusing on taking immediate and unequivocal action to put a stop to Israel’s genocide and ending any risk of UK complicity in it.”
The Met said a “significant number of people” at the event were seen “displaying placards expressing support for Palestine Action”.
Home Secretary Yvette Cooper said: “The right to protest is one we protect fiercely but this is very different from displaying support for this one specific and narrow, proscribed organisation.
“Palestine Action was proscribed based on strong security advice following serious attacks the group has committed, involving violence, significant injuries and extensive criminal damage.”
Please use Chrome browser for a more accessible video player
Palestine Action supporters arrested at protest
Police said those arrested had been taken to processing points in Westminster and any whose details could be confirmed were bailed on condition they didn’t attend further Palestine Action support events.
Others whose details could not be verified, possibly because they refused to give them, were taken to custody suites across London.
Pic: PA
The protests have put a strain on authorities’ capacity to cope.
Sky News understands senior leaders in the prison service, known as “Capacity Gold”, met today to discuss how to deal with the large number of arrests as the male prison estate is close to full.
It’s understood 800 inmates were moved out of the busiest jails in and around London beforehand.
In a statement, the Metropolitan Police Federation said: “Thinking of our colleagues and wishing all assaulted officers well. Remember there are no ‘extra’ police officers – just the same ones having their days off cancelled, having to work longer shifts and being moved from other areas. Officers are emotionally and physically exhausted.”
Read more: What does proscribing a group mean?
Legislation to ban Palestine Action came into force on 5 July, making it a criminal offence to show support for the organisation, carrying a prison sentence of up to 14 years.
Defend Our Juries said earlier this week the protest would still go ahead, following several similar demonstrations since it was outlawed last month.
On Saturday, a spokesperson said: “Palestine Action and people holding cardboard signs present no danger to the public at large.”
Pic: PA
Human rights advocates Amnesty International described the arrests of so many people under UK terrorism law as “deeply concerning”.
Another march organised by the Palestine Coalition, which is a separate group, set off from Russell Square and assembled on Whitehall.
The Met Police said one person had been arrested there for showing a placard in support of Palestine Action.
Pic: Reuters
Earlier this week, three people charged as a result of illegal Palestine Action activity were named.
Jeremy Shippam, 71, of West Sussex, Judit Murray, also 71, of Surrey, and Fiona Maclean, 53, of Hackney in east London, will appear at Westminster Magistrates’ Court on 16 September.
The ban on Palestine Action faces a legal challenge in November after the High Court granted a full judicial review to Palestine Action co-founder Huda Ammori.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike