Jeremy Hunt today unleashed a barrage of tax hikes on Brits and a wave of future cuts that critics will say herald a new era of austerity.
The Tory Chancellor announced tens of billions of pounds in cuts and stealth hikes - which will create misery for millions - in the Autumn Statement.
And he said the UK is now in recession, based on the Office for Budget Responsibility forecasts. The watchdog said GDP was to grow by 4.2% this year then falls 1.4% in 2023, before rising again by 1.3%, 2.6% and 2.7% in the following three years.
Household disposable income will plummet 7.1% in real terms over this year and next year put together, the OBR watchdog said - the biggest drop since records began in 1956. It will still be below pre-pandemic levels by 2028.
Average Council Tax bills will soar over £2,000 for a Band D home in April, as Mr Hunt allowed "flexibility" to raise bills by 5%.
And energy bills will rocket by £500 to an average £3,000 a year from April - nearly £2,000 higher than they were in 2021 - as the Energy Price Guarantee is made less generous.
Labour's Rachel Reeves blasted: “The Conservatives have picked the pockets of nurses and wallets of the entire country”.
In a bid to protect the vulnerable, Mr Hunt announced new cost-of-living payments worth £900 for benefit claimants - £250 more than this year. He also announced cost-of-living payments worth £300 for pensioners and £150 for the disabled next year.
But that’ll create a “cliff edge” where millions of working poor get nothing - and there will be no more universal £400 cost-of-living payments to fill the gap.
The minimum wage will rise 92p an hour to £10.42 (9.7%), and state pension and benefits will rise 10.1% with inflation from April.
But Mr Hunt planted a field of landmines to hit hard-working Brits and knackered public services from 2025 - after he might be out of office.
He extended a flurry of tax threshold freezes from 2026 to 2028 - meaning they’ll last six years and raid tens of billions of pounds from people’s pockets as wages rise.
Frozen to 2028 will be the £12,570 threshold for 20p Income Tax and 12p National Insurance, the £50,270 threshold for 40p Income Tax, and the inheritance tax threshold.
Firms will also be hit by a stealth raid on employer National Insurance contributions to 2028 as that threshold is frozen.
And the £150,000 threshold for paying 45p tax will be lowered to £125,140, costing £150k earners just over £1,200 extra per year.
The Chancellor also delayed a long-promised £86,000 lifetime cap on what people pay for social care, from October 2023 to October 2025.
The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024.
And the annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 next year and then to £3,000 from April 2024, the Chancellor said.
Mr Hunt tried to claim his statement was not ‘Austerity 2.0’, saying public spending will rise 1% year on year in real terms.
He said: "We are going to grow public spending, but we're going to grow it slower than the economy.
"For the remaining two years of this Spending Review, we will protect the increases in departmental budgets we have already set out in cash terms. And we will then grow resource spending at 1% a year in real terms in the three years that follow."
But the small print shows the vast wave of austerity Jeremy Hunt plans to unleash after the next election - if he’s still in office.
The Chancellor has kept current spending plans until April 2025. But he will unleash cuts of £11.6bn in 2025/26, £23.2bn in 2026/27, and £36.3bn in 2027/28, compared to previous plans.
He will do this by raising revenue spending in real terms only by 1% beyond 2025, and cutting capital spending - on big infrastructure projects - in real terms by freezing it at the 2025 rate.
He admitted: "Departments will have to make efficiencies to deal with inflationary pressures."
The Government is to press ahead with building a new nuclear power plant at Sizewell C in Suffolk, the Chancellor announced.
Mr Hunt told MPs the project will create 10,000 highly skilled jobs as well as providing reliable, low carbon energy to six million homes.
The autumn statement said that subject to final approvals, contracts will be signed with relevant parties, including EDF, by the end of this month.
Doubts were raised last month after reports that the multi billion pound project could be axed.
But the Chancellor said the Government would invest £700 million in Sizewell C, adding that it was the first state backing for a nuclear project in over 30 years.
Labour's Rachel Reeves blasted: “We aren’t recovering, we’re heading to recession.“
“This is the price of a decade of Tory choices and economic failure... this government has forced our economy into a doom loop."
Official forecasts today revealed the shocking damage done to the economy by the Tories - including from Liz Truss ’s disastrous mini-Budget.
Inflation is forecast to be 9.1% this year and 7.4% next year, before falling sharply from the middle of next year.
Mr Hunt told MPs "we will face into the storm" and his budget statement was based on "British values" of balancing the books - a target the Tories have had to delay by a decade.
But there will be questions about whether his brutal cutbacks will ever be achieved, as the Tories could be thrown out of office if Labour win the 2024 election.
That would leave Labour’s Chancellor with a difficult choice of whether to tear up the nation’s economic plan or carry on regardless.
MPs groaned as Mr Hunt tried to shift the blame from Liz Truss’s chaos, saying: “The Office for Budget Responsibility confirms global factors are the primary cause of current inflation”.
In the short term Jeremy Hunt also faces a Tory revolt.
Ex-Cabinet minister Esther McVey said she would vote against tax rises if the HS2 rail line was not scrapped.
And 23 Conservative MPs wrote to Jeremy Hunt to demand he cuts fuel duty - despite the fact fuel duty is only due to be announced in the Budget next year.
The MPs - including ex-Cabinet ministers Priti Patel and Brandon Lewis, and 1922 Committee chief Sir Graham Brady - said a temporary 5p cut should last longer, and then go further.
Mr Hunt claimed he was forced to announce a wave of cuts after Liz Truss’s botched bid to borrow £72billion for tax cuts sent the markets haywire.
Days before the statement the Bank of England raised the base rate of interest to 3%, hiking the cost of mortgages, and warned the UK was heading into the longest recession in 100 years.
Mr Hunt had already warned his statement would be “very difficult” and he would be a "Scrooge" making "horrible decisions" in the run-up to Christmas.
Today he told MPs “the UK will always pay its way”, saying "I understand the motivation of my predecessor’s mini budget" but “unfunded tax cuts are as risky as unfunded spending”.
There were cries of outrage from Tory MPs as Mr Hunt declared: “As Conservatives we do not leave our debts to the next generation”.
Liz Truss and Kwasi Kwarteng were not spotted in the chamber ahead of the statement, where Mr Hunt drove the final nail into billions of pounds of their plans.
But Boris Johnson and Theresa May were both there, sitting opposite each other across the aisle.
Boris Johnson rolled his eyes and shook his head when the Chancellor announced the social care reform delay.
Mr Hunt said he was announcing extra funding for social care of up to £2.8bn next year and £4.7bn the year after, and would raise the NHS budget by £3.3bn in each of the next two years.
But he warned NHS managers would have to tackle “waste and inefficiency”, adding: "We want Scandinavian quality alongside Singaporean efficiency".
The government will cap the increase in social rents to a maximum of 7% in 2023/24 - a saving for the average tenant of £200 next year, Mr Hunt said.
And in a new threat to workers, a review of state pension age published in early 2023 which could hike it for people currently doing a job.
Meanwhile Mr Hunt said he will move back the managed transition of people on ESA to Universal Credit to 2028 - a FOUR year delay on top of many delays already.
And he will ask over 600,000 more people on Universal Credit to meet with a work coach to “get the support they need”.
Mr Hunt also increased the windfall tax on oil and gas giants from 25% to 35% and imposed a 45% levy on electricity generators to raise an estimated £14billion next year.
