Jeremy Hunt has said he will hike council tax on Thursday, with the increase set to help pay for social care.
The chancellor told MPs today that he will “be asking people who have more, to contribute even more” and that this “will be reflected in our decisions on council tax”.
Thursday’s statement will have a mixture of spending cuts and tax hikes for everyone as the chancellor tries to raise £55bn to cut government borrowing.
The Telegraph reported yesterday that he is set to allow local authorities responsible for social care to hike council tax by 5 per cent without a local referendum.
Hunt said it’s “going to be a very difficult announcement on Thursday”.
It has been speculated the government will freeze Income Tax thresholds on Thursday, in a stealth tax raid, while also reducing the top 45p bracket from £150,000 to £125,000.
Hunt is expected to increase the windfall tax on energy companies from 25 to 35 per cent and extend it to 2028, while also hiking capital gains tax.
Prime Minister Rishi Sunak said today during the G20 summit in Indonesia that the fiscal statement will be done in a “compassionate way”.
He added: “It’s right we get a grip on inflation, it’s right that we limit the increases in mortgage rates – that means having public finances that are more sustainable and that command the confidence of international markets.
“I am prepared to do difficult things, I did that as chancellor and of course the government is going to do what’s right for the long-term interests of this country.”
The UK’s debt pile has ballooned after Covid-19 and a series of energy support packages, while the government’s repayment costs surged after the disastrous September mini-Budget.
It comes after the Bank of England recently predicted that the UK will be in a recession for two years from early 2023.