UK’s Sunak, Hunt say all Britons will need to pay more tax to fix fiscal black hole

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All Britons will have to pay more in tax in coming years to fix the UK’s fiscal black hole, the UK government said on Monday, laying out in stark terms the economic challenge faced by Prime Minister Rishi Sunak’s fledgling administration.

Sunak met with Chancellor of the Exchequer Jeremy Hunt on Monday to discuss tax and spending plans ahead of an economic statement planned for November 17.

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They discussed the “eye-watering gap” in Britain’s public finances, and agreed “tough decisions are needed on tax rises and on spending,” according to a Treasury readout.

“They agreed on the principle that those with the broadest shoulders should be asked to bear the greatest burden,” the Treasury said. “However, given the enormity of the challenge, it is inevitable that everybody would need to contribute more in tax in the years ahead.”

The brutal assessment lays out the challenge for Sunak as he seeks to guide the country through a cost-of-living crisis that’s seen the government pledge tens of billions of pounds to help households and businesses cope with surging energy prices this winter.

At the same time as rolling out that aid, the premier is looking for savings and tax increases totaling as much as £50 billion ($57 billion) as he seeks to rebuild the UK’s credibility with financial markets after the disastrous economic strategy pursued by his predecessor, Liz Truss, roiled financial markets.

Hunt is due to announce an Autumn Statement -- essentially a budget in all but name -- on November 17 and is considering options including extending a windfall tax on energy firms and freezing personal income tax thresholds.

It’s also likely to involve politically-difficult spending cuts for government departments which may further harm the Conservative Party’s poor ratings in the polls.

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