Britain’s Finance Minister Jeremy Hunt on Wednesday unveiled a package of measures to boost purchasing power and get more Britons back into the labor market to boost growth, during a day of massive strikes in the face of to inflation.
All aid for energy and to meet the cost of living is estimated at 94 billion pounds (107.7 billion euros) over two years, said the minister.
He also assured that the United Kingdom would not be in technical recession in 2023 – two consecutive quarters of decline in gross domestic product (GDP), an improvement made possible by the fall in energy prices for a year.
However, the government anticipates a contraction of 0.2% over the year due to an air pocket expected for the first quarter alone, before a rebound, according to forecasts by the OBR, a public budget forecasting body.
“The British economy contradicts those who doubted it,” the minister emphatically proclaimed in Parliament, while global markets were gripped by a wave of panic over the difficulties of Credit Suisse and the banking sector.
The International Monetary Fund (IMF) warned in its latest forecast that London would be the only major economy in recession this year.
In response to pressing demands from Britons who are seeing double-digit inflation eroding their purchasing power, the Treasury has extended for three months the ceiling on energy bills paid by the majority of British households, which should have been raised on April 1.
The Chancellor of the Exchequer – the title of the UK’s economy minister – argued that inflation should drop “from 10.7% in the last quarter of last year to 2.9% by the end of 2023”, again according to data from the OBR.
Among other measures to help purchasing power, the minister announced a 12-month extension of the fuel tax freeze.
The minister also promised to put an end to what was widely considered an injustice: the higher energy tariffs paid by the approximately 4 million households in the country, often very modest, connected via prepaid meters.
The budget announcement came amid one of the biggest strike days in months, with hundreds of thousands of people walking out, teachers, London Underground drivers, doctors, demanding wage hikes .
The Unite union has also called this budget a “historic betrayal” where “there was not a penny for the NHS”, the public health service.
The government is moving to reform the childcare system, described by Mr Hunt as ‘one of the most expensive in the world’, admitting it often forces parents, especially women, to rethink their career plans even give up working.
“For many women, a career break means the end of a career,” Hunt noted.
London will thus set up tax incentives to set up childcare structures and thus increase availability.
The inactivity rate in the UK, at 21.3%, remains higher than before the pandemic and is weighing on the economy, adding to the difficulties in hiring Europeans after Brexit.
Thousands of people over 50 have chosen to take early retirement and a record number of Britons are being kept out of work by long-term illnesses, one of the consequences of the pandemic and healthcare underfunding public.
Opposition Labor leader Keir Starmer called the increase in the tax-free ceiling on pension contributions and the abolition of the maximum limit of contributions during a lifetime a “huge gift to the richest”.
At the same time, the Conservative minister wants to put pressure on the recipients of social minima, with a stricter application of sanctions in the event of breaches of their obligations.
While the British Chamber of Commerce welcomed the boost for parents of young children and the over 50s, it lamented, among other things, the lack of energy support for businesses.
03/15/2023 17:36:31 – London (AFP) – © 2023 AFP
