Jeremy Hunt’s statement on medium-term fiscal plan: key points at a glance
Jeremy Hunt says the basic rate of income tax will remain at 20% and do so “indefinitely” until economic circumstances allow it to be cut.
He says itis a “deeply held Conservative value” that people should keep more of the money they earn, but that financial markets are “rightly demanding commitment to sustainable public finances”.
“It is not right to borrow to fund this tax cut,” he says.
Taken together with keeping corporation tax rise, and keeping the 45p additional rate, the measures he is announcing will raise £32bn a year.
The chancellor says the government’s flagship energy price guarantee will be kept for just six months.
Support between now and April will not change, he says, but beyond that “it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.”
The Treasury will review how energy bills are supported beyond April. Hunt says the objective is to design a new approach that will “cost the taxpayers significantly less than planned while ensuring support for those most in need”. Support for business “most affected” will also be put in place.
The chancellor concludes by saying that there will be “more difficult decisions” on both tax and spending to come.
The government must get debt falling as a percentage of GDP over the medium term, he says.
“Some areas of spending will need to be cut,” he adds.
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