The move to increase the number of taxpayers paying the 45 p.m. tax rate. it’s a handbrake turn by Liz Truss’s government, which has proposed scrapping the rate entirely. A Treasury source said there was an option to increase the basic rate of tax, but a “significant reduction” in the threshold for higher earners would be more likely. In next Thursday’s Autumn Statement, Hunt will set out tax rises and spending cuts totaling £60bn, broken down roughly into spending cuts of £35bn and tax rises of £25bn. The move to raise the cap on the 45p rate would be consistent with Hunt’s public promise that tax rises should hit those with the “broadest shoulders”, although he is expected to freeze the lower tax brackets, which would they generate billions for the Treasury. more earners drift into different tax brackets due to inflation. But the Treasury has ruled out changes to pension tax relief at higher rates amid concerns it could discourage people from saving and hit middle income earners. Ministers are also discussing the possibility of significant tax increases by allowing changes to the rules that councils must hold referendums if they raise taxes by more than 2.99%. Hunt and Rishi Sunak have put most of the budget pressure on spending cuts, though the statement will stick to the current spending review for the next two years — which will likely see county spending squeezed by inflation. But departments are likely to see the rate of spending decline after that point. “Even during austerity budgets have increased but interest rates will be much lower than they could have been,” said a Whitehall source. Sunak and Hunt are said to want to avoid real-terms cuts to benefits or break the pension triple lock, where billions could be saved by increasing both in line with earnings rather than inflation. Preliminary work sent to the Office for Budget Responsibility is understood to have included the possibility of increasing both in line with inflation, something many Tory MPs have publicly called for. But a senior source said that while Hunt and Sunak’s instinct was to protect pensions and benefit increases, there were still concerns about the current balance of measures “to add up the numbers” and that those areas they had not been removed from the table. . Subscribe to The Guardian Headlines UK A roundup of the top morning headlines emailed straight to you every day of the week Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. The scale of the measures needed has grown bigger than the dire predictions by the Bank of England last week, when it predicted higher interest rates would push the economy into its biggest recession since the 1930s. The Bank blamed higher energy prices and a tight labor market for the decision to raise interest rates. Hunt’s fiscal tightening is likely to worsen forecasts and the Bank said the economy is already contracting and will continue to contract for eight straight quarters until the summer of 2024. On Wednesday, former finance minister Harriet Baldwin was chosen to chair the finance ministry select committee after her predecessor, Mel Strid, joined Mr Sunak’s cabinet. Baldwin, who previously worked for JP Morgan, has long been a skeptic of the Bank of England’s performance, repeatedly pressing the governor, Andrew Bailey, for low interest rates long before Vladimir Putin’s invasion of Ukraine and the ensuing financial crisis. unrest.
