Pension triple lock under threat in £40bn Halloween Budget cuts as tax burden soars to highest since 1950 and families face £5,000 energy bills after Jeremy Hunt’s U-turn – with minister openly threatening to QUIT if he targets defence spending
Jeremy Hunt is facing open threats from ministers to quit as he draws up ‘eye-watering’ £40billion cuts for his Halloween Budget – with the pensions triple lock and the defence budget in the firing line.
The Chancellor announced he was reversing £32billion of Liz Truss’s tax cuts yesterday, as the government scrambles to quell market panic.
But the huge tightening is less than half of the estimated £72billion black hole in the public finances. Mr Hunt insisted that Britain must ‘pay its way’, refusing to rule out breaking the triple lock – which means pensions rise in line with the highest out of inflation, wages, or 2.5 per cent.
And Treasury sources have insisted that not even health and defence will be exempt from the savings drive.
Defence minister James Heappey today vowed to resign if the government drops a commitment to be spending 3 per cent of GDP on the military by 2030. His boss Ben Wallace – seen as a leadership contender – has been making similar noises.
Meanwhile, the grim situation faced by Britons has been underlined with warnings that average energy bills could hit £5,000 a year, after Mr Hunt U-turned on the ‘guarantee’ to cap them at £2,500 until late 2024.
Now tax cuts have been jettisoned, the burden as a proportion of GDP is set to surge to a level not seen since 1950
Chancellor Jeremy Hunt announced he was reversing £32billion of Liz Truss’s tax cuts yesterday, as the government scrambles to quell market panic
Now tax cuts have been jettisoned, the burden is also set to surge to a level not seen since 1950.
The Resolution Foundation think tank warned spending cuts could be as deep as those after the 2009 financial crisis, and that middle-income families may be unable to pay energy bills next year.
Chief executive Torsten Bell told BBC Radio 4’s Today programme there was a fiscal black hole of around £30billion even after the Government scrapped nearly all of its mini-budget.
‘These are big numbers. If we are talking of spending cuts between £30-40billion then they’re not that far off the scale of the cuts announced by George Osborne back in 2010,’ he said.
On the scaling down of energy support, Mr Bell said: ‘It’s a big deal, if he (Chancellor Jeremy Hunt) did scrap all of that he’s saving up to £40 billion, but it’s a big deal for households too because our bills are due to hit £4,000 in April.
The mini-Budget tax cuts were the biggest since the 1970s – and the rises announced by Jeremy Hunt yesterday were the biggest since the early 1990s
‘I think really £4,000 is so large that even middle-income households won’t be able to afford those bills next year.
‘So he’s done the easy bit, scrapping the existing scheme, what he’s got to do is some hard work about how he intends to provide support for lower and middle-income households next year.’
Analysts Auxilione have forecasted average bills could hit £5,078 next year, while other estimates have predicted the Ofgem cap will be £4,350 in April.
In a round of interviews this morning, Mr Heappey stressed the Government still backs the defence spending target.
But asked if he would quit , he told LBC: ‘Yeah.
‘But no one has said that 3 per cent is not going to happen by 2030.’
He insisted he would quit if that changed though, saying: ‘Yeah, we need to be spending 3 per cent of our GDP on defence of our nation by 2030 because there is no prosperity without security.’
Defence minister James Heappey today vowed to resign if the government drops a commitment to be spending 3 per cent of GDP on the military by 2030
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