Hunt to offer help for firms struggling for staff
Chancellor Jeremy Hunt said he will be offering help for companies struggling with labour shortages when he unveils his Autumn Statement on Thursday.
He said 600,000 people have left the labour force as a result of the pandemic and it was something he would be talking about on Thursday.
“We need to understand why that is because that is creating constraints for businesses who can’t employ the people they want to,” he said in a television interview.
He said everyone would pay more tax, but insisted the UK is a resilient country.
“We have a plan to see us through choppy waters. We will make the recession we are in as short and shallow as possible,” he said, although Britain is not yet in recession. However, there was a 0.2% fall in output in the last quarter and it is expected to decline again in the current quarter.
He noted that while the UK not emulating other countries by returning to pre-pandemic rates of output, other countries are facing the same headwinds from energy costs and inflation which are being tackled by tax rises.
“I am confident that the British economy has some very good fundamentals that will see us through this,” he said.
“This year we have the fastest growth of all G7 countries,” he said.
Asked whether Brexit was the reason Britain’s economy was lagging other countries, Mr Hunt said: “I don’t think that’s the biggest issue … I think it’s much more to do with other factors in the labour market that I want to think about.”
He added: “I don’t accept the premise that Brexit will make us poorer.. there are opportunities.”
The chancellor is expected to announce plans to cut public spending by about £35bn and raise taxes by some £20bn.
Mr Hunt has abandoned plans to reinstate Labour’s 50p top tax rate – but will still hammer higher earners by reducing the income level at which the top 45p rate kicks in (in Eng from £150,000 to £125,000.
There is also expected to be a hike in the windfall tax on oil and gas giants from 25 to 35% and a cut in the tax-free allowance for share dividends.
Labour’s Shadow Chancellor said that a “proper” windfall tax on energy producers, as well as taxing the windfall profits of electricity generators, could bring in over £50 billion for the public finances.
The calculations released by Labour show that an extension of the windfall tax on energy producers – first proposed by Labour in January 2022 – till 2027/28 as well as increasing the rate to 78% and eliminating the investment allowance loophole could bring in an extra £34 billion than the £28billion currently expected.
So high are energy producers profits, that such an extension of the windfall tax would simply bring back their profits to what they were expecting over the next couple of years before Russia invaded Ukraine, and would bring us in line with Norway’s current rate.
Labour is also calling for the profits of electricity generators to be subject to a windfall tax. Pointing to reports that electricity generators may be making as much as £70 billion in excess profits over the next two years, Labour has pointed to figures published by the Onward think-tank which suggest as much as £20 billion can be generated over the next two years through a windfall tax on these profits.
Shadow Chancellor Rachel Reeves said: “If I was Chancellor going into the Autumn Statement next week, I’d be focused on making fairer choices and on growing the economy.
“Instead of heaping the pressure on ordinary working people – which is what we heard from the Chancellor today – we should be making choices like extending the windfall tax on energy producers and electricity generators.
“That could bring in £50 billion to the public finances, and that is a choice that Labour would make at the Autumn Statement next week.”