Post-Truss UK to unveil a new tax-related plan for fixing the country’s economy
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This Sunday, the UK government announced major impending tax hikes that will hit the entire country, and especially the wealthy, as part of the plan to repair the current economy. The country was left in a bad state following the short tenure of Liz Truss as the UK Prime Minister, and now, her successor, Rishi Sunak, is left to deal with the consequences.
Incoming tax hikes will strike everyone, especially the rich
Sunak has promised that the soaring inflation will be dealt with in any way possible, even if that means an additional burden on both businesses and consumers. Jeremy Hunt, the acting finance minister, clarified the situation, noting that the tax hikes will fall disproportionately, particularly targeting those considered to be “better off.” For the time being, the exact details of the plan are not known, as Sunek intends to unveil them in the emergency budget statement this Thursday.
Hunt remarked that everyone would have to pay a bit more tax in order to get things under control, especially after a tax-cutting budget by Truss, which caused panic throughout the country’s financial markets. He also added that the UK economy was likely in recession already, following the third quarter of 2022. However, he noted that the UK is a resilient country and that it faced much bigger challenges throughout its history.
The chancellor of the exchequer said that everyone will have to make certain sacrifices but also that the UK is a fair society and that there is only so much that the government can ask from its people, especially when it comes to those on the very lowest incomes. With the financial state of all citizens in mind, Hunt will reportedly change some income tax brackets. The idea is to have high earners pay more while simultaneously imposing strict curbs on government spending.
Reportedly, the government is seeking up to 60 billion GBP ($71 billion) in extra revenue and savings, hence the tax rises and spending cuts.
UK continues to struggle on all fronts
Another problem that the country is facing is the surge in energy prices, which is yet another consequence of the war in Ukraine. According to Hunt, this led to an economic hit of 140 billion GBP. He also acknowledged that the NHS (National Health Service) has been under severe pressure due to the coronavirus pandemic, which also placed the country’s doctors and nurses under “unbearable pressure.”
Despite this, however, the government rejected Britain’s main nursing union’s 17% pay claim, which resulted in the union opting to go on a strike for the first time in 106 years. Hunt commented on this by saying that the country would never be able to deal with inflation if it fulfilled all inflation-proof pay rises.
Many others were less than pleased with the turns the current government has announced and taken so far across various industries, leading to tens of thousands of UK citizens going on strike, which has been going on since the summer. On top of that, there is also evidence of Brexit causing long-term harm to the UK, including the fact that similar economies have already started recovering from the harm caused by the pandemic while the UK continues to sink deeper into financial troubles. However, while Hunt did not deny this, he insisted that there are also opportunities in leaving the EU, which will become more apparent further down the road.