Chancellor warns of 'difficult decisions' in Autumn Statement as inflation reaches 41-year high
Jeremy Hunt promises his plan will weather an economic “storm”, but risks a backlash from his own MPs over raising taxes, while energy bill support is likely to be scaled back and public services face cuts.
Today’s statement comes less than 24 hours after soaring energy bills sent UK inflation to its highest level for 41 years in October as households felt the brunt of the cost of living crisis.
Speaking less than two-months on from the disastrous mini-budget which experts say wiped £30 billion of the economy, Mr Hunt will promise to put the UK on a “balanced path to stability”.
The new Chancellor will say his “difficult decisions” are necessary to keep mortgage rates low and tackle the rocketing energy and food prices intensifying the cost-of-living crisis.
He is expected to say: “As countries all over the world grapple with inflation, our plan reflects British values: we are both honest about the challenges, and fair in our solutions.
“We are taking difficult decisions to deliver strong public finances and help keep mortgage rates low, but our plan also protects our long-term economic growth.
“At the same time, we protect the vulnerable, because to be British is to be compassionate.
“There is a global energy crisis, a global inflation crisis and a global economic crisis.
"But the British people are tough, inventive, and resourceful. We have risen to bigger challenges before.
“We aren’t immune to these global headwinds, but with this plan for stability, growth and public services - we will face into the storm”.
Mr Hunt faces a challenge of finding up to £60 billion with cuts and tax hikes, while the long-awaited independent forecasts from the Office for Budget Responsibility (OBR) will also be published.They are expected to detail bleak prospects for an economy teetering on a recession, if not already in one.
It came as the Office for National Statistics (ONS) revealed that inflation jumped to a higher-than-expected 11.1 per cent in October – the highest rate since October 1981.
The month saw gas and electricity costs soar, despite Government support limiting the rise in bills, and was considerably higher than the 10.7 per cent expected by economists.
The ONS said gas prices have leaped nearly 130 per cent higher over the past year, while electricity has risen by around 66 per cent.
Families were also hit by rising costs across a range of food items, which also pushed up the cost of living to eye watering levels.
The jump in inflation – the biggest leap since March to April when Ofgem’s energy price cap was last changed – comes despite the Government energy support, which has sought to limit annual household gas and electricity bills at around £2,500 a year.
Labour 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.
“Britain has so much potential but we are falling behind on the global stage, while mortgages, food and energy costs all go up and up.
“What Britain needs in the Autumn Statement today are fairer choices for working people, and a proper plan for growth.
“That’s why Labour has a long-term plan to get our economy growing again – powered by the talent and effort of millions of working people and thousands of businesses.
“It will be fairer, greener, and more dynamic. Labour's Green Prosperity Plan, our modern Industrial Strategy and our active partnership with business will get our economy firing on all cylinders.”
The Liberal Democrats warned stealth taxes accompanied by a “barrage of bills” and rising mortgages will leave a typical family £4,900 worse off next year.
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.
Mr Hunt could also face a revolt from his own party, with growing anger at planned tax rises.Wednesday saw Conservative former cabinet minister Esther McVey claim HS2 is an “unnecessary vanity project” and tell MPs she would not support tax rises unless it was scrapped.
During the Conservative leadership race in the summer, the now Chancellor said he would have made Ms McVey his deputy prime minister if successful.
Ms McVey told the Commons: “Given that we have the highest burden of taxation in living memory, it is clear that the Government’s financial difficulties are caused by overspending and not due to under-taxing.
“Does the Deputy Prime Minister therefore agree if the Government has got enough money to proceed with HS2 at any cost, then it has sufficient money not to increase taxes?
“If, however, it has so little money it has to increase taxes, which is the last thing for a Conservative government to do, then it doesn’t have sufficient money for HS2?
“So can I gently urge the Deputy Prime Minister not to ask Conservative MPs to support any tax rises unless and until this unnecessary vanity project is scrapped because I, for one, won’t support them”.The day also saw the SNP demand an apology from Dominic Raab over the state of the economy at PMQs, and urged to match the Scottish Child Payment.
Deputy Prime Minister Dominic Raab did not apologise for what the SNP said was a “financial crisis” following Liz Truss’s so-called mini-budget, when he was challenged about it at Prime Minister’s Questions.
SNP deputy Westminster leader Kirsten Oswald said: “Yesterday the Prime Minister was asked six different times to apologise for the disaster of the Tory mini-budget and the financial crisis it caused, and all six times he refused to say sorry.
“And now this morning people are waking up to the news that this Christmas they will be hit with the worst inflation in 41 years.
“So will the Deputy Prime Minister stand up today and do what his boss wouldn’t – will he say sorry?”
Mr Raab, who was deputising for Mr Sunak, declined to do so, but insisted the Autumn Statement would “set out our plan to take the Scottish people and everyone across the United Kingdom through these challenges.”
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