It's remarkable to think that it was just 6 weeks ago when the UK revealed its biggest spending spree in decades - one which sparked a bond market crisis, a political shake up and the resignation of the now former PM Liz Truss. Fast forward to today when in a dramatic reversal, we learn that the UK is sinking into Greek-style austerity: the Telegraph reports that Prime Minister Rishi Sunak and finance minister Jeremy Hunt plan to reveal a stealth tax raid on pensions later this month.
The pension lifetime allowance is set to be frozen for two more years, with a rise in line with prices delayed from 2025 to 2027, the newspaper said.
The allowance level has risen with prices in the past, but Sunak - as finance minister last year - froze the allowance until 2025. The move was forecast to bring the Treasury close to a billion pounds over the period, Telegraph said. And with the UK set to remain in a recessionary stagflation, with near-double digit CPI for the foreseeable future, UK retirees' purchasing power will be drained faster than Biden can syphon away oil from the US SPR.
The Treasury is now planning to announce that the freeze will be extended until 2027, the end of the five-year period for which plans will be produced, the report said.
Sunak and Hunt, who need to fill a fiscal gap of nearly 50 billion pounds ($56.88 billion) during the Nov. 17 budget, have agreed to split the cost roughly equally between spending cuts and tax rises, according to the Telegraph.
The duo do not want to break the 2019 Tory election manifesto promises or raise the rates of major taxes, the Telegraph said citing Treasury sources. They are also determined to make sure the well-off carry more of the burden for the tax rises than the poorest, a move which means that another government crisis is assured in the very near term.
Separately, the Times reported that Sunak warned that people cannot expect the state to “fix every problem” and vowed to regain the trust of voters by being honest about the scale of the economic difficulties ahead.
‘The State can’t fix all your problems’ Sunak— Jemma Forte (@jemmaforte) November 5, 2022
42bn - Brexit divorce bill
9bn - lost to Covid fraud
32bn - lost taxes due to Brexit trade hit
37bn - track and trace
40-50bn - cost of Truss lunacy
The state IS the problem. We pay for Tory ineptitude every day. pic.twitter.com/j66WPvKJbF
Finally, the FT also reports that Sunak is under pressure regarding bullying claims concerning one of his closest political allies with the opposition Labor party calling for an independent investigation of allegations of bullying by Sir Gavin Williamson who was appointed as Minister of State without Portfolio last month.
In short: just the right amount of fear, loathing, chaos and confusion, that one has grown to expect from UK politics.