Chancellor Defends Financial Squeeze, More Strikes Underway, COP27 Ends
Jeremy Hunt delivered his "difficult" Autumn Statement yesterday (Alamy)
6 min read
As the UK enters a recession, Chancellor Jeremy Hunt has defended his "difficult" Autumn Statement, multiple unions are set to take further strike action, and climate change talks come to a close at the COP27 summit in Egypt.
Jeremy Hunt admits economic plans will cause short-term pain for long-term gain
Chancellor Jeremy Hunt has defended yesterday's Autumn Statement which includes a series of tax rises and spending cuts totalling £55bn.
‘Pain’ was a consistent theme across Friday's newspaper headlines, as the UK enters a recession and industry leaders and critics respond to the measures Hunt announced yesterday.
Hunt told the BBC this morning that the new plans would give people “certainty”, but admitted people will have difficult months ahead as they cope with rising costs and falling living standards.
"We are doing the things that will make a big difference over the long term,” he said. “We're prepared to take the difficult decisions to get there."
Measures included lowering the threshold at which the 45p rate of income tax is paid from £150,000 to £125,140, confirming plans to provide £55bn of support for households, and expanding the windfall tax on energy companies, in stark contrast to the mini-Budget announced by Hunt’s predecessor Kwasi Kwarteng in September.
Defending the tax rises, Hunt said that "sound money matters more than low taxes," and that it simply “wasn't possible” to raise £25bn by taxing only the wealthiest.
The Office for National Statistics (ONS) released figures that showed the UK has the worst performance in GDP compared to pre-pandemic levels in the G7.
But Hunt said he “disagrees” with that statement and that "statistics can be cut in lots of different ways".
When asked by the BBC about the UK’s relationship with the European Union, he claimed he has “great confidence” that Britain would be able to remove trade barriers with the EU in the coming years, but that he would not support rejoining the single market.
The Labour Party has criticised the government’s decision not to introduce a non-dom tax status, which would impose a tax on those residing in the UK whose permanent home is outside the country.
Shadow Chancellor Rachel Reeves told the BBC "fairer choices" could have been made on tax and said it was “unforgivable” that the government is not extending the windfall tax even further.
"Every pound left on the table on windfall tax is a pound that could've been spent in easing some of these cost of living pressures," she said.
Hunt defended keeping the non-dom tax status by saying that such a measure would "damage the long-term attractiveness of the UK" and that it would be a poor economic decision even if it made sense “politically”.
Strike action begins at Heathrow Airport
Ground handlers at Heathrow Airport are starting a three-day strike today in a pay dispute, with widespread disruption to flights expected.
The strike action involves around 350 workers at aviation services firm Menzies, according to Unite, the UK’s leading union.
The strikes will disrupt a number of flights leaving terminals 2, 3 and 4 at Britain’s busiest airport, and will particularly affect Air Canada, American Airlines, Lufthansa, Swiss Air, Air Portugal, Austrian airlines, Qantas, Egypt Air, Aer Lingus and Finnair.
Unite general secretary Sharon Graham said: “Unite’s members at Menzies play a critical role in ensuring that planes operate safely at Heathrow.
“Menzies is a wealthy company and it can fully afford to pay its workers a decent pay increase. It is greed not need which is preventing a fair pay offer being made.”
The Heathrow dispute is just one in a series of potential strike action across multiple industries in the coming months.
After 100,000 civil servants from the Public and Commercial Services union (PCS) voted to go on strike in a dispute over pay, pensions and jobs, further civil service strikes are expected to be announced today.
Members of the Royal College of Nursing voted in favour of the first-ever UK nursing strike action, which will be the largest industrial action the NHS has ever seen.
The union is arguing for better pay and working conditions, and has ramped up the pressure on the government with General Secretary Pat Cullen writing to Health Secretary Steve Barclay to confirm the strikes.
Cullen said in the letter: “Unless our next meeting is formal pay negotiations, beginning within the next 5 days, we will be announcing the dates and locations of our December strike action.”
Countries deeply divided as COP27 climate change talks end
Discussions at COP27 will conclude today, but the nations involved are deeply divided over fossil fuels and how to help poor countries cope with climate change.
The largest area of contention is over the need for a new fund to help countries deal with the immediate impacts of climate change, known as “loss and damage”.
Rich countries fear that as the primary contributors to rising climate change, they will have to pay for it for centuries to come, and now government negotiators from nearly 200 countries are scrambling to build a consensus on the issue.
The UK is among the nations under pressure to agree to the deal.
The United Nations (UN) published a 20-page first draft of a hoped-for final agreement yesterday, but environmental campaigners accuse it of being a “non-paper” as it repeats many of the goals set out in the Glasgow COP26 talks last year.
An agreement from the EU may now be on the cards, as in the early hours of this morning, the European Commission vice-president Frans Timmermans launched a proposal on behalf of the EU that would see it agree to a loss and damage fund for poor countries.
After attending COP27, Prime Minister Rishi Sunak announced the UK will launch a major international climate package to deliver on the UK’s Glasgow legacy.
They will include £65.5m for green tech innovation and significant clean energy investments with Kenya and Egypt.
Sunak said: "By honouring the pledges we made in Glasgow, we can turn our struggle against climate change into a global mission for new jobs and clean growth.
"And we can bequeath our children a greener planet and a more prosperous future."
PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe