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Jeremy Hunt has defended his budget plan to get people back to work amid allegations that he is handing out a massive £1 billion tax gift to some of the country's richest people. The Chancellor said the measures he tabled in the House of Commons on Wednesday will have a "transformational" impact on the economy, alleviating labor shortages that are holding back growth. They include a major expansion of access to publicly funded child care aimed at removing one of the main barriers preventing parents from returning to the workplace, a move that has been very well received.
However, there has been controversy over a tax break to discourage around 15,000 high earners from leaving the job market early, including the removal of the £1.07m lifetime retirement allowance.
Labor said it was the "wrong priority" and would seek to force a vote on it in the House of Commons next week.
The move is mainly aimed at NHS consultants who have left the health service because they say the retirement rules mean it's not worth continuing.
However, it has come under heavy criticism, with think tank Resolution Foundation (RF) saying it was a "huge waste of money", costing around £47,000 per job.
He said such a large tax giveaway could cause some workers to choose to retire early or use their now unlimited retirement savings to avoid inheritance tax.
"It's a big win for NHS consultants, but poor value for money for Britain," said RF chief executive Torsten Bell.
Appearing on ITV's Peston, Hunt insisted he was "systematically" removing barriers to work, while the government spent five times as much to help with childcare costs.
“So this is one of the big things that business organizations like CBI have been calling for, and it's transformative change for our economy,” he said.
"Because after the Brexit referendum, the country decided we weren't going to fill our vacancies with unlimited low-skilled migration and that's how we approached it without doing it."
Meanwhile, unions have complained that he has found £6bn to re-freeze fuel taxes, while refusing to provide additional money to public sector workers seeking pay increases commensurate with the cost of life.
Some Conservative MPs were also unhappy with his decision to go ahead with a planned increase in corporate tax to 25% from 19%, though he softened the blow with a three-year break that allowed underwriting investments in factories and machines. tax free.
Hunt said he would make the UK "the most attractive investment environment in the world" over the next three years, pledging to make it permanent as soon as possible.
However, he has refused to commit to tax cuts before the next general election due in just over a year.
“My job is to do what's right for the economy and then people will see that they can trust the conservatives to grow the economy. This is the electoral dividend. I'm not interested in playing games," he said.
While the Office for Budgetary Responsibility, the official forecaster, is no longer predicting the UK will enter recession this year, it warned that the country still faces the biggest pressure on living standards on record.
Paul Johnson, director of the Institute for Fiscal Studies, declared qu'il s'agissait d'un "choix politique" de la chancelière de geler les taxes sur le carburant plutôt que de financer des primes salariales pour les infirmières et les enseignants on strike.
He warned that households face "extremely difficult" times with a series of sharp personal tax increases due to take effect next month.
The freeze on income tax thresholds, announced by Mr Hunt in the November autumn return, will mean base rate taxpayers will pay an extra £500 in 2023-24, while higher rate taxpayers , it will be an additional £1,000.
“These tax increases may be necessary from a fiscal perspective, but they are an important part of why household income is expected to fall further in the current two-year period than at any other time in living memory.” said. .
PA wire
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