In light of the country’s economic hardships, the UK government divulged its £55 billion ($66 billion) spending plan.
According to newly installed Finance Minister Jeremy Hunt, the plan will attempt to jumpstart the economy. Hunt said the program would reduce spending by £30 billion while raising taxes to generate around £25 billion. In addition, the plan will freeze income tax for two years and lower the top tax rate to £125,140. These aspects contravene the former administration’s proposed budget plan.
“Unfunded tax cuts are as risky as unfunded spending. So we need a fiscal and monetary policy to work together. That means the government and the Banks working in lockstep. It means, in particular, giving the world confidence in our ability to pay our debts,” Hunt said.
Fortunately, Hunt’s spending pattern did not resemble Truss and Kwarteng’s. The defunct Prime Minister and Finance Minister stepped aside mainly because of the budget proposal they revealed in September, which attracted widespread condemnation from the public. However, Hunt recognizes that the current plan will burden all UK households and businesses. However, he thinks they are important to avoid the 41-year high inflation.
″We must continue a relentless fight to bring (inflation) down, including a rock-solid commitment to rebuild our public finances,” Hunt added.
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The UK will see more action
More changes will be on the way for Hunt’s and Rishi Sunak’s government as they try to overcome the country’s inflationary pressures. The budget contains an additional 10% in benefits such as state pensions and tax credits.
The UK government also elevated the National Living Wage to £10.42 for workers aged 23 and up. Meanwhile, Hunt confirmed that the windfall tax would increase from 25% to 35% for the energy industry. Household welfare benefits will also be reduced, with a household paying £3,000 rather than £2,500.
When Truss previously addressed the UK’s problematic economic situation, she also noted the prospect of making difficult choices for the nation. Unlike Sunak and Hunt, Truss made judgments that devastated her political career. As a result, she was made to resign from her job and serve a remarkably short stay as Prime Minister.
“We had to take urgent action to get our economy growing, get Britain moving, and also deal with inflation, and of course, that means taking controversial and difficult decisions. But I’m prepared to do that as prime minister because what’s important to me is that we get our economy moving,” she said.
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A struggle hard for the nation
Truss ceded enormous responsibility to PM Sunak. When Sunak took over, he needed to pronounce it instantly to soothe the public and business sectors. Many people speculated that Sunak would fix the country’s economic difficulties because of his broad government experience.
“Right now, our country is facing a profound economic crisis. The aftermath of COVID still lingers. Putin’s war in Ukraine has destabilized energy markets and supply chains the world over. I will place economic stability and confidence at the heart of this government’s agenda. This will mean difficult decisions to come,” Sunak said after his appointment.
Photo Credit: Public News Time
Source: CNBC
