Chancellor Rishi Sunak expected to try to rebalance books after massive borrowing to pay for pandemic, with jobs plan, salaire minimum, council tax and student loans in the spotlight
Mr Sunak is expected to make a swathe of announcements as he seeks to rebalance the books after the “fiscal meteorite” that was the Covid-19 pandemic saw him shell out billions of pounds to keep the country afloat.
A plan for jobs is expected to be at the centre of this Autumn Budget, Mr Sunak having already announced £500m in funding to help people back into work after the winding down of the furlough scheme on 30 septembre.
As part of Boris Johnson’s “Build Back Better” strategy to shift the country to a “high wage, high skill, high productivity economy”, as outlined in his recent address to the Conservative Party conference in Manchester, Mr Sunak is also being tipped to raise the minimum wage for over-23s to £9.42 per hour, having last done so in his Spring Budget on 3 March when he lifted it to £8.91.
He may end the one-year freeze on public sector pay, which last year hit 1.3 million professionals including civil servants, council staff, teachers and emergency services personnel (NHS frontline workers were exempted) in a move the government deemed necessary at the time to rein in the national deficit.
Mr Sunak spoke in Manchester on 4 October of his preference for making tax cuts while stressing he is unlikely to be able to do so this time out given that the government borrowed a record £299bn at the height of the pandemic between April 2020 et avril 2021.
Au lieu, un autre council tax rise is thought to be likely, given that the Conservatives have raised local levies every year for the past 10 and could do so again, perhaps by as much as 5 pour cent.
le Trésorerie has already frozen income tax thresholds and announced an unpopular 1.25 per cent rise in National Insurance contributions to pay for health and social care, a move that flew in the face of the Tories’ 2019 election manifesto pledge that it would not raise taxes.
The Treasury has yet to outline its plans for how Britain can pay its way towards realising the 78 per cent reduction in carbon dioxide it has pledged to hit by 2035 and achieving net zero carbon emissions by 2050.
But the government has already trailed the availability of £5,000 heat pump grants from next April to encourage homeowners to dump their existing gas boilers for low-carbon alternatives with a view to phasing out the fossil fuel-reliant precursor by 2035.
In a bid to recoup cash, the chancellor might also lower the threshold at which students begin to repay their higher education loans.
Actuellement, students in England and Wales pay 9 per cent of everything they earn above £27,295 per year until their loan is paid off but that could come down to as little as £23,000 in the interests of clawing back £2bn a year more quickly, at no little cost to recent graduates.
Keen observers have also suggested the Treasury could significantly bolster its coffers by curtailing tax relief on pension savings for those on high salaries or by capping the amount employees can put aside for their retirement years.