UK
Jeremy Hunt to 'face red wall revolt' if he cuts inheritance tax while squeezing benefits
TAX CUTS FOR ME, AUSTERITY FOR THEE
18 November 2023
Jeremy Hunt could face unrest from Conservative MPs in former Labour heartlands in northern England if he cuts inheritance tax while reforming the welfare system
The Chancellor is said to be contemplating slashing inheritance tax by as much as half in next Wednesday's .
And he said on Saturday that he was contemplating "difficult decisions to reform the welfare state".
Economists have given the Chancellor a better-than-expected spending forecast, meaning that he has up to £10 billion more to spend on measures, which he could use to pay for the tax cut.
Mr Hunt may be letting himself in for criticism from some quarters if he is seen to be reducing inheritance tax - a move likely to benefit the wealthy - while cutting welfare for working-aged adults.
Mr Hunt told broadcasters in Milton Keynes: "You are going to have to wait until Wednesday to hear the decisions I take but one thing I want to be very clear about: there's no easy way to reduce the tax burden.
"What we need to do is take difficult decisions to reform the welfare state."
Benefits normally go up in April based on rate of inflation from the previous September. Mr Hunt is said to be looking at a different rate by which to increase benefit payments.
'Red wall' Conservative MPs, many of whom represent more traditionally working class constituencies in the north and the Midlands, said they were unsure about the plans.
John Stevenson, chairman of the Northern Research Group, which represents between 30 and 40 members in red wall seats, told the Guardian: "I am all for reforming tax and inheritance tax needs reforming. However at this time any tax cuts should be aimed at helping businesses or the lower paid.”
Jonathan Gullis, the MP for Stoke-on-Trent North, said: "While long term this [inheritance tax] should be eventually abolished, now is not the right time for this tax cut.
"Instead, we should be looking at cutting the basic rate of income tax [and] increasing the 40p tax threshold to help families really feeling the pinch."
Among other changes set to be announced in the Autumn Statement,
Mr Hunt will finally reveal the details of a consultation which will give communities extra benefits if they agree to having the electrical infrastructure near their homes.
Households could get £1,000 a year off their bills for several years.
Locals will also be able to get extra cash for local projects including roads and GPs as part of a bid to woo them over.
However, the news has already got a backlash from campaigners, who say that bill help should not be based on geography.
Mr Hunt said on Friday that the government was set on a path to “reducing the tax burden”.
Speaking to The Telegraph, Mr Hunt said: “The big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.
“It’s not an easy path. There are difficult decisions you have to take to get there.
“But we believe if we’re going to grow the economy, this is going to be an Autumn Statement for growth, then we have to show the country there is a path to a lower tax economy.”
Aside from tax cuts, the Chancellor is also poised to announce a crackdown on benefits claimants and energy bills help for people who agree to have pylons installed in their area.
Asked specifically whether the statement would see the introduction of tax cuts, Mr Hunt said: "Without pre-empting the decisions that the Prime Minister and I make, this is an Autumn Statement for growth. It’s a turning point for the economy."
His comments come after new data published this week showed inflation had dropped sharply to 4.6% from 6.7%, the lowest it has been in two years.
The new data meant the government met its target to halve inflation by the end of the year.
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While the specifics of Mr Hunt’s statement next week remain unknown, inheritance tax cuts and a crackdown on benefits claimants are thought to be among the measures announced.
Another measure set to be announced is a £120 rise in council tax for the average family.
The Treasury is rumoured to be planning to announce changes to the pension triple-lock, which guarantees that pension rates will rise by either the rate of inflation, 2.5%, or the rate of wage increases over the past year.
Under the planned changes, bonuses could be scrapped from the wage growth calculations.
Homeowners who make their houses more energy efficient within two years of purchasing could get a partial Stamp Duty rebate, under new plans set to be announced in the Autumn statement.
The threshold at which people start paying stamp duty could also increase.
The rate is currently 5% of the value of a property over £250,000 and 10% of the value of properties over £925,000.
“FISCALLY INEPT AND MORALLY BANKRUPT”: GOVERNMENT WASTES ALMOST £100BN
November 19, 2023
The UK Government is reported to have wastefully spent or dubiously allocated an estimated £99,418,907,782 of tax-payers’ money since 2019.
This eye-watering figure, totalled up in Best for Britain’s Scandalous Spending Tracker, is almost 100 times what’s needed to end industrial action from junior doctors and almost equal to the total amount the government spent on education last year.
The total includes £140m sunk on the Rwanda Deal, which was this week ruled unlawful by the Supreme Court. As well as £2.3bn spent on cancelled parts of HS2, and £50m spent on a new helicopter for top Tories.
The new figures come to light as the Chancellor prepares to unveil his Autumn Statement amid an ongoing cost-of-living crisis when 1 in 3 children are living in poverty in the UK. Lack of investment in public services has also led to school closures and record NHS waiting times.
As Chancellor and then Prime Minister, Rishi Sunak has had responsibility for government spending for almost all of this period.
Campaigners claim the figures demonstrate the urgent need for an immediate general election.
Naomi Smith, CEO of Best for Britain, said:
“The notion that the Tories are safe with money has been blown out of the water. It’s disgraceful that the government continues to squander huge amounts of public money whilst so many struggle to feed their families and heat their homes.
“We can’t wait any longer for change. This fiscally inept, and morally bankrupt government must go and that’s why at the next election, Best for Britain will organise the most powerful tactical voting operation the nation has ever seen.”
Jeremy Hunt says ‘difficult decisions’ needed on benefits as he hints at inheritance tax giveaway
The Chancellor is expected to announce a cut to inheritance tax in Wednesday’s autumn statement as he puts a squeeze on benefits
Chancellor Jeremy Hunt has said “difficult decisions to reform the welfare state” are needed as he considers squeezing benefits while slashing inheritance tax in his forthcoming autumn statement.
Mr Hunt indicated he could reduce levies on businesses and has given his strongest hint yet that he will use Wednesday’s financial statement to cut taxes in a bid to boost economic growth.
During a visit to Milton Keynes on Saturday, the chancellor would not be drawn on reports of tax cuts but said he would “not do anything to jeopardise” the battle against inflation after the Prime Minister’s target of halving it this year was hit.
Speaking to broadcasters on Saturday during a visit to Milton Keynes, the Chancellor said: “You are going to have to wait until Wednesday to hear the decisions I take but one thing I want to be very clear about: there’s no easy way to reduce the tax burden.
“What we need to do is take difficult decisions to reform the welfare state.
“When it comes to tax, I know there’s been a lot of speculation, we will not do anything that compromises the battle against inflation.
“We’ve succeeded this week in halving inflation compared to when I became Chancellor and Rishi Sunak became Prime Minister, that is the single-most important thing we’ve done and we will not do anything to jeopardise the progress.”
He said “we will always be a compassionate Conservative government” but cited “nearly a million vacancies across the economy, so we do need to reform our welfare system.”
Ahead of Wednesday’s financial announcement, the Chancellor told the Telegraph that now is a “turning point for the economy” and that “this is the moment” to go for growth.
He added: “The big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.”
Ministers have already announced a fresh welfare crackdown in an attempt to get people back into work under a toughened sanctions scheme.
Among the new measures, free prescriptions and legal aid will be cut off for benefit claimants who are deemed fit to work and do not seek employment.
Mel Stride, the work and pensions secretary, said: “We are expanding the voluntary support for people with health conditions and disabilities, including our flagship Universal Support programme.
“But our message is clear: if you are fit, if you refuse to work, if you are taking taxpayers for a ride – we will take your benefits away.”
Disability Rights UK is among those critical of the move.
“For many people, benefits is their sole income because work is not an option,” the charity said.
“For those who could and want to work vague threats around the removal of benefits, free prescriptions and sanctions if not accepting the first job offered are not helping, in fact they are causing those already in the throes of long-term ill health and lifelong disability to suffer worsening health issues.”
Meanwhile, it has been widely trailed that Mr Hunt is mulling a cut to inheritance tax in a bid to gain support from the right of the party.
Prime Minister Rishi Sunak is under mounting pressure as the Conservative Party lags more than 20 points behind Labour in the polls.
Around only four per cent of deaths in 2020/21 resulted in inheritance tax being paid, with exemptions allowing many couples to pass on up to £1 million tax-free.
According to The Times, the options for cutting inheritance tax – which is charged at 40 per cent above £325,000, with an extra £175,000 towards a main residence passed to direct descendants – include reducing it by 50 per cent, 30 per cent, or 20 per cent.
The Tories are said to be then considering making abolishing it entirely an election manifesto pledge next year, which could cost £7 billion a year in the short term.
However, the Institute for Fiscal Studies forecast that the amount that the tax raises could rise to more than £15 billion by 2033.
Conservative former chancellor Lord Clarke said that while the move may please MPs on the Tory right, he warned others would find it “appalling”.
He told Times Radio: “Well, it’s not the tax cut I would choose. Indeed, I’m not sure he’s got any room for tax cuts.
“And choosing inheritance tax at the present time might appeal to the Conservative right, but it leaves them open to the most appalling criticisms when inflation and the state of affairs is making poorer people in this country very vulnerable indeed, giving tax relief to those families that are lucky enough to have members of it with capital above the limit through inheritance tax and pay any significant amount of tax on the inheritance.”
He added he was “not sure that the economic and financial state of the country justifies it”.
Labour leader Sir Keir Starmer told broadcasters during a visit in Scotland: “We’ll have to wait to see what the Government says in its autumn statement. What I want to see is a serious plan for growth.”
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