Jeremy Hunt to unveil package of tax hikes and spending cuts in autumn statement to plug £54bn black hole
Jeremy Hunt will promise to weather an economic “storm” by raising taxes, cutting public spending and scaling back energy support to fill a £54bn black hole in the nation’s finances.
The chancellor will insist to MPs on Thursday that his autumn statement puts the UK on a “balanced path to stability” as he tackles the “enemy” of inflation, which has soared to a 41-year high.
But the measures could put him on a collision course with Tory MPs on the right of his party who are already voicing anger about the prospect of some of the plans.
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An 11th hour petition from two dozen Tory MPs, led by Jonathan Gullis, has been sent to the chancellor asking him not to hike fuel duty in the statement.
The package will be in the form of £30bn of spending cuts and £24bn in tax rises over the next five years – a stark contrast to Kwasi Kwarteng’s unfunded tax-slashing spending splurge two months ago.
Among the measures, annual energy bills for a typical household will stay capped at £2,500, but this will rise to £3,000 in April 2023, when support will become more targeted with additional payments for low-income households and pensioners, Sky’s political editor Beth Rigby understands.
On tax rises, those with the broadest shoulders will bear most of the burden, but there will be pain all around.
The chancellor is expected to lower the threshold for paying the highest rate of tax to £125,000 – down from the existing £150,000.
This is a marked difference to Liz Truss’s plans to scrap the 45p rate altogether, giving the highest earners an average tax cut of £10,000.
Analysis says lowering the threshold will bring an extra 246,000 people into the highest bracket at a cost to them of around £580 each a year, which in turn would raise the Treasury £1.3bn a year.
Mr Hunt is also expected to announce a freeze on personal income tax and national insurance tax thresholds lasting until 2028.
Sometimes referred to as a “stealth tax”, freezing tax thresholds drags more earners into paying higher rates of tax.
Mr Hunt has already hinted he will make it easier for local authorities to increase council tax, with reports suggesting the threshold for raising bills without a referendum could increase from 2.99% to 5%.
There is also expected to be a big increase in the windfall tax on energy companies, and a new tax on electricity generators.
Labour has previously said a windfall tax extension could raise an additional £50bn, and criticised what it calls the “loophole” that allows gas and oil firms to offset their tax liability if they invest back into the UK.
On spending cuts, departments are expected to be told to live within an envelope of the March Spending Review, when inflation at was 3%.
With inflation now at 11.1%, that amounts to a real-terms cut across the board, meaning tough choices will be necessary.
However, there will be some exceptions, with the NHS expected to get more money.
There is also likely to be some protection for the schools budget, Sky’s deputy political editor Sam Coates understands.
“There will inevitably be some good news after the weeks of doom-laden warnings,” he said.
Mr Sunak and Mr Hunt have spent weeks warning that tough choices lay ahead.
However, the prime minister told Sky News on Tuesday that “fairness and compassion” will be at the heart of his decisions.
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Rishi Sunak refuses to apologise for the economic turmoil Liz Truss’s short-lived government caused for the UK
It is understood the chancellor will keep the triple lock for pensioners in his autumn statement – honouring a manifesto commitment.
He is also expected to uprate benefits in line with inflation, rather than earnings (a controversial move that would have saved £5bn).
The government has not confirmed what measures will be in the statement, but there has been a constant stream of measures reportedly being considered.
This “pitch rolling” helps markets get an idea of what is coming down the road and avoids spooking traders.
When Ms Truss and Mr Kwarteng made several surprise announcements in their mini-budget in September, it contributed to the financial chaos which saw the pound crash and the Bank of England forced to intervene to prevent pension funds from collapsing.
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Analysis released on Monday by the independent Resolution Foundation think tank found the mistakes they made cost the UK £30bn, doubling the sum the Treasury says will have to be raised.
Mr Hunt will say that his “difficult decisions” are necessary to keep mortgage rates low and tackle the rocketing energy and food prices intensifying the cost of living crisis.
“Families across Britain make sacrifices every day to live within their means, and so too must governments because the United Kingdom will always pay its way,” he is expected to say.
But Tories on the right of the Conservative Party are already voicing anger about the prospect of raising taxes.
Among the Tory critics, former cabinet minister Esther McVey has warned she will not support tax rises without the scrapping of the “unnecessary vanity project” of HS2.
Former business secretary Jacob Rees-Mogg told ITV’s Peston he would vote for the budget so as to not bring the government down, but warned he opposes tax increases, which he believes “risks making a recession worse”.
Labour has also warned that Britain is “falling behind on the global stage”.
Shadow chancellor Rachel Reeves said: “The country is being held back by 12 years of Tory economic failure and wasted opportunities and working people are paying the price.
“What Britain needs in the autumn statement are fairer choices for working people, and a proper plan for growth.”
And Sharon Graham, the general secretary of the Unite union, warned Mr Hunt “workers are ready to take a stand”.
“He can choose to inject investment into the NHS and deliver a fair pay deal – or he can leave it as it is today, in danger of fatal collapse,” she said.
UK
No criminal charges over death of ice hockey player Adam Johnson whose neck was cut by opponent’s skate
No criminal charges will be brought over the death of an ice hockey player who died during a match in Sheffield, prosecutors have announced.
Nottingham Panthers’ Adam Johnson died in October 2023 after his neck was cut by an opposition player’s skate during a match at Sheffield’s Utilita Arena.
The Sheffield Steelers player, Matthew Petgrave, was arrested on suspicion of manslaughter and later bailed – but the Crown Prosecution Service (CPS) has now said it will not bring criminal charges against the Canadian.
Michael Quinn, deputy chief crown prosecutor, said: “This was a shocking and deeply upsetting incident. The CPS and South Yorkshire Police have worked closely together to determine whether any criminal charges should be brought against the other ice hockey player involved.
“Following a thorough police investigation and a comprehensive review of all the evidence by the CPS, we have concluded that there is not a realistic prospect of conviction for any criminal offence and so there will not be a prosecution.
“Our thoughts remain with the family and friends of Adam Johnson.”
Tributes were left outside the Motorpoint Arena in Nottingham following the ice hockey player’s death. Pic PA
Before joining Nottingham Panthers, the Minnesota-born Johnson played in Pennsylvania for the Pittsburgh Penguins, and Sweden for the Malmo Redhawks.
He also played in California for Ontario Reign and in Germany for Augsburger Panther.
A post-mortem examination confirmed the 29-year-old died as a result of the fatal neck injury.
The crowd of 8,000 spectators watched in horror as desperate attempts were made to save his life as he lay on the ice, shielded by fellow players.
The game was abandoned and spectators were asked to leave in the aftermath.
Pic PA
Kari Johnson, Johnson’s aunt, was watching the match via a livestream with his father and grandmother when he was fatally injured.
Speaking to Sky News at the time, Ms Johnson said: “It was a mess, it was a nightmare, it was like it wasn’t real. We were in shock, we couldn’t believe this was happening.”
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Kari Johnson said her nephew was ‘a kind soul’
Ms Johnson described her nephew as a “kind soul” and a “private kid” who “never would have wanted to be in the limelight like this”.
He simply wanted to be “good at hockey and have fun”, she said, adding he was “having the time of his life in the UK” and was planning to get engaged to his girlfriend.
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In January 2024, Sheffield’s senior coroner, Tanyka Rawden, suspended her investigation while the police inquiry took its course.
It later emerged that Ms Rawden had issued a Prevention of Future Deaths Report to Ice Hockey UK and the English Ice Hockey Association (EIHA) about the use of neck guards in the sport.
In the report, Ms Rawden said she was “sufficiently concerned that deaths may occur in the future if neck guards or protectors are not worn”, with the bodies given 56 days to say what action had been taken – or why action had not been taken.
Neck guards have been mandatory in the Elite League (EIHL), in which the Nottingham Panthers and Sheffield Steelers compete, since January 2024.
This followed the International Ice Hockey Federation’s decision in December to mandate the use of neck laceration protectors for its competitions.
UK
Government reviewing ‘right to family life’ court decisions as sex offenders to be denied refugee status
Court decisions where people were granted asylum after arguing they had a “right to family life” will be reviewed as the government plans to ban migrants convicted of sex offences, the home secretary has said.
Foreign nationals who are added to the sex offenders register will forfeit their rights to protection under the Refugee Convention, the Home Office announced.
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As part of the 1951 UN treaty, countries are allowed to refuse asylum to terrorists, war criminals and individuals convicted of a “particularly serious crime” – which is currently defined in UK law as an offence carrying a sentence of 12 months or more.
The government now plans to extend that definition to include all individuals added to the Sex Offenders’ Register, regardless of the length of sentence, in an amendment to the Border Security, Asylum and Immigration Bill, which is currently going through parliament.
Home Secretary Yvette Cooper told Sky News the new definition would also “take into account” sexual offence convictions in another country.
However, she was less clear if those affected will still be able to appeal against their removal from the UK under the European Convention on Human Rights (ECHR).
More than 10,000 people have now been detected crossing the Channel. Pic: PA
She said: “We continue to comply with international law, but the whole point is that our laws and our frameworks are about how we interpret international law… and how we make sure that the courts are then making their decisions based on the UK law that parliament has passed.”
She added the government is “reviewing” a “series of decisions” made in the courts where criminals have been allowed to stay in the UK under Article 8 of the Human Rights Act, which protects the right to respect “your private life, your family life, your home and your correspondence”.
“We are reviewing that because we do believe that the way in which it’s being interpreted in the courts is an issue and actually, there is greater clarification we can provide through our law to address that,” she said.
It is unclear how many asylum seekers will be affected by the change in law, as the government has been unable to provide any projections or past data on the number of asylum seekers added to the Sex Offenders’ Register.
Ms Cooper earlier said: “Sex offenders who pose a risk to the community should not be allowed to benefit from refugee protections in the UK. We are strengthening the law to ensure these appalling crimes are taken seriously.”
Safeguarding and Violence Against Women and Girls Minister Jess Philips said: “We are determined to achieve our mission of halving violence against women and girls in a decade.
“That’s exactly why we are taking action to ensure there are robust safeguards across the system, including by clamping down on foreign criminals who commit heinous crimes like sex offences.”
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Has Labour tackled migration?
The Home Office would like voters to see this as a substantial change. But that’s hard to demonstrate without providing any indication of the scale of the problem it seeks to solve.
Clearly, the government does not want to fan the flames of resentment towards asylum seekers by implying large numbers have been committing sex crimes.
But amid rising voter frustration about the government’s grip on the issue, and under pressure from Reform – this measure is about signalling it is prepared to take tough action.
Conservatives: ‘Too little, too late’
The Conservatives claim Labour are engaged in “pre-election posturing”.
Chris Philp, the shadow home secretary, said: “This is too little, too late from a Labour government that has scrapped our deterrent and overseen the worst year ever for small boat crossings – with a record 10,000 people crossing this year already.
“Foreign criminals pose a danger to British citizens and must be removed, but so often this is frustrated by spurious legal claims based on human rights claims, not asylum claims.”
The Home Office has also announced plans to introduce a 24-week target for appeal hearings (known as “first-tier tribunals”) to be held for rejected asylum seekers living in taxpayer-supported accommodation, or for foreign national offenders.
The current average wait is 50 weeks.
The idea is to cut the asylum backlog and save taxpayers money – Labour have committed to end the use of asylum hotels by the end of this parliament.
It’s unclear how exactly this will be achieved, although a number of additional court days have already been announced.
The government also plans to crack down on fake immigration lawyers who advise migrants on how to lodge fraudulent asylum claims, with the Immigration Advice Authority given new powers to issue fines of up to £15,000.
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