Jeremy Hunt’s Autumn Budget slammed on GB News
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Jeremy Hunt’s Autumn budget was slammed for “discouraging investment” in the UK economy by returning to the “old orthodoxy” of cuts to public sector spending and higher taxes. International trade adviser Shanker Singham told GB News Mr Hunt was tackling the wrong problem with the economy and he should be focusing on “generating economic activity”. He said the market reactions to Liz Truss September mini-budget, which prioritised stimulating growth, had spooked the Government into trying to generate investment over shoring up existing debt, but that the long term implications of such a policy would be counterintuitive.
Mr Singham said: “My concern here is there is a danger you throw the baby out with the bathwater and because of the market’s reaction to the [September] mini-budget, what we are seeing now is very much back to the old orthodoxy of the only levers you can really pull are austerity, cuts to public sector spending, or tax rises.
“Unfortunately, the issue is that that is not the problem with the UK economy. The problem over the long term has been a lack of growth and, therefore, the levers you should be pulling are those that generate economic activity.
“That is principally regulatory reform. To some extent you want to do something about the tax burden, which is incredibly high in the UK.
“If you make it higher, if you make it worse for people, you are just going to discourage investment in the UK, and you are going to discourage people from coming to the UK.
“You are also going to encourage people to leave the UK and go to places where they are not facing such a high tax rate.
“So, I hope we are now going to see some concrete regulatory reform proposals that lower the costs, that make things cheaper for people, that are focused on growing the economy and creating economic activity.
“But I have to say, we have not seen much sign of that at the moment.”
Shadow finance minister Rachel Reeves acknowledged today that “economic stability” is paramount during this time of crisis in the UK but called for a “plan for growth”.
She said: “We really need a serious plan to grow our economy because there is an alternative to all of this.
“And Labour have already set out both the rock of economic stability, which the economy needs, but also that plan for growth – the green prosperity plan, the reform to business rates, the reforms to make Britain the best place to start and grow a business.
“That is what Labour would have been offering if it had been our autumn statement yesterday.”
In light of Mr Hunt’s budget announcement, the economy is predicted to contract by 1.4 percent next year and unemployment is expected to rise by more than 500,000.
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Taxes are also set to reach their highest level as a share of national income since the end of the Second World War.
Former business secretary Jacob Rees-Mogg accused the Chancellor of taking the “easy option” in Thursday’s autumn statement rather than bearing down harder on public spending.
He said the country needed lower taxes to drive up growth after Mr Hunt acknowledged that the UK was already in recession.
At the same time, independent analysts said Mr Hunt’s promised spending cuts would mean a prolonged squeeze on public sector pay despite a growing clamour in many services for real-terms increases after the years of austerity.
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