Tories now the party of high taxes, according to voters

Thank you for joining me for today's politics live blog. 

I will be back early on Monday morning. 

Lord Frost, the former Brexit minister, delivered his verdict on the Autumn Statement in a piece for The Telegraph. He writes: 

We like talking tough while avoiding hard choices, so that’s what we have got. We don’t like cutting spending, so it hasn’t fallen. 

We don’t really want change that upsets anyone, so we don’t try to make it happen. 

The problem is that the constituency for the status quo is shrinking. Change is coming. We can deliver it – or we can be swept away by it.

You can read the piece in full here. 

IMF managing director Kristalina Georgieva told Chancellor Jeremy Hunt in a call that his Autumn Statement “strikes the right balance”, following the UN financial institution’s criticism of Kwasi Kwarteng mini-Budget.

She tweeted: "In a call with Chancellor Hunt today, I welcomed (British) autumn statement prepared at a difficult time for the UK economy, against strong global headwinds.

"It strikes the right balance between fiscal responsibility and protecting growth & vulnerable households."

Jeremy Hunt pledged to remove the “vast majority of trade barriers” with the European Union to boost growth, as he appeared to call for closer economic ties.

The Chancellor rejected the prospect of rejoining the Single Market but backed work in the coming years to strengthen Britain’s relationship with Brussels.

His comments indicated that the Government may want to change aspects of the deal struck by Boris Johnson, the former prime minister, at the end of 2020.

Mr Hunt’s words also suggested contrasting priorities to some Tory Brexiteers, who saw leaving the EU as an opportunity to focus on “global Britain” by prioritising trade outside of the continent.

You can read the story in full here. 

Three quarters of people are “very” or “fairly” concerned about their ability to afford their energy bills in the coming months amid the cost-of-living crisis, a new poll has found. 

A survey conducted by Redfield & Wilton Strategies for The Telegraph found 44 per cent of people are very concerned. 

Some 31 per cent are fairly concerned and 16 per cent are slightly concerned. Just eight per cent said they are not at all concerned. The poll was conducted the day before the Autumn Statement.

British adults believe Ukraine is more likely to win the war than Russia is, according to a new survey conducted by Redfield & Wilton Strategies. 

The poll for The Telegraph found 41 per cent of people believe Ukraine is more likely to win, while 21 per cent picked Russia. 

Some 35 per cent had picked Ukraine and 28 per cent picked Russia when the question was asked previously in October.

Voters believe that Rishi Sunak will be more respected than Boris Johnson on the world stage, according to a new poll. 

A Redfield & Wilton Strategies survey for The Telegraph found 43 per cent believe the new Prime Minister will be more respected by his counterparts than Mr Johnson was. 

A quarter - 25 per cent - said Mr Sunak would be as respected as Mr Johnson and 18 per cent said the premier will be less respected than his predecessor.

Sir Keir Starmer has revealed he has been talking to Sir Tony Blair and Gordon Brown "for some time now" to ask for their advice on preparing the Labour Party for power.

He told Times Radio: "I've been talking to Tony Blair and Gordon Brown for some time now, because I wanted to make sure I understood how those two or three years before you go to the general election, and hopefully win it, what that feels like… you can't replicate the policies but the pace, the way that we do politics, I have talked to them a lot about what that period felt like, what needed to be done, when. 

"I'm conscious, going back to the shadow cabinet, that we've been unfortunately out of power for 12 years. That means I don't have people around the shadow cabinet table who've got huge experience in government. 

"That's actually the same position that Tony Blair had going into '97. I think, from memory, he only had Margaret Beckett. So I'm determined that we need to be prepared for government and ready to hit the ground running."

More people believe Rachel Reeves would be a better chancellor than Jeremy Hunt, according to a new poll. 

The survey, conducted for The Telegraph by Redfield & Wilton Strategies, found 29 per cent of people said Ms Reeves would be better at the job while 27 per cent picked Mr Hunt. 

Some 44 per cent of people said they did not know.

A senior Tory MP said it is not "impossible" for the Conservative Party to win the next general election. 

Sir Charles Walker told Times Radio: "I think we're still in a hole. We've been in power for 14 years, we had the recent indulgence of a prime minister that lasted for 44 days. 

"So are we going to bounce back and take a lead in the opinion polls? I very much doubt it. But are we facing the wipeout of the sort that Electoral Calculus was predicting if the general election would be held sometime in early November, late October, where I think we would have had 14 seats? No, I think that immediate crisis has passed."

He added: "In the balance of probability after 14 years, the Conservatives are not going to form the next government. But they might, it's not impossible."

Sir Charles Walker, a senior Tory MP, said he does not "like" the Autumn Statement but believes it is "necessary". 

He told Times Radio: "I think Jeremy has had a hugely responsible budget. I am sure almost all my colleagues, if not all of them will support that. 

"They don't have to like it. I mean, I don't particularly like it, as I said, but I know it's necessary."

The Institute for Fiscal Studies think tank has warned that the fall in living standards forecast for the coming years will be the largest since records began.

Senior research economist Xiaowei Xu said: "The outlook for living standards is frankly quite dire.

"We see that since 2008 a number of shocks to real incomes, many more than we’ve seen in previous decades, but the falls in real incomes we’re expected to see in the next two years are far larger still than the shocks in recent history.

"And indeed they’re the largest falls we’ve seen since records began."

Several Conservative backbenchers were privately "stunned" by the scale of the tax rises and spending cuts in yesterday's Autumn Statement, the Telegraph has been told.

"They were stunned at how socialist it was, they were stunned at how little effort there was to paint a better picture," one Tory MP said.

"We want some optimism, we want the Government to show us a better future. Government is not only there to manage you through a storm, it’s to get you out of a storm into the sunny waters."

Sir Ed Davey, the leader of the Liberal Democrats, has now responded to the IFS's verdict on the Autumn Statement (see the post below at 11.04). 

He said: "This blistering verdict confirms the British public's worst fears. Everyone is being made to suffer eye-watering increases in tax, bills and mortgage payments because of this Conservative government's terrible mistakes.

"People's living standards are falling off a cliff and public services are suffocating under the weight of this Conservative chaos and incompetence.

"Conservative ministers are responsible for economic vandalism on a scale never seen before in British history. Never has a party been so unfit for government."

Two thirds of people believe Britain is in decline, according to a new poll conducted for The Telegraph by Redfield & Wilton Strategies.

Some 67 per cent of respondents agreed with the statement that “Britain is in decline”. 

Just 19 per cent said they believed “Britain is heading for brighter days”. 

The poll was conducted the day before the Autumn Statement.

A majority of voters now most associate the Conservative Party with raising taxes rather than lowering them. 

An exclusive poll for The Telegraph conducted by Redfield & Wilton Strategies found that 51 per cent of people now associated the Tories with raising taxes. 

Some 14 per cent most associated the Tories with lowering taxes. Some 21 per cent answered neither. 

The answer was more evenly split for Labour with 28 per cent associating the party with raising taxes and 26 per cent lowering taxes. 

The poll was conducted the day before the Autumn Statement. 

The Conservative Party is more associated with high taxes than the Labour Party, according to a new poll. 

Asked which party they associated with high taxes, some 42 per cent of people picked the Tories while 17 per cent picked Labour. 

Some 26 per cent chose both parties. The exclusive Redfield & Wilton Strategies poll for The Telegraph was conducted the day before the Autumn Statement.

A senior Conservative MP has labelled yesterday's Autumn Statement "wrong economics and bad politics", writes Dominic Penna.

Sir John Redwood, a former policy adviser to Margaret Thatcher, urged the Government to get away from a model "where we print money, we borrow money and we import things".

"Profits are not a bad thing – profits are the lifeblood of business," Sir John said. "What the new leadership has to recognise is we are all the same party, and the majority of the party members voted for the Growth Plan.

"Instead of attacking it, the Government has to make it work, adopt it and deal with the bits they think didn’t work. We are fighting for the prosperity and future of this country."

The UK is facing a "long, hard, unpleasant journey" in the coming years, Paul Johnson, the director of the Institute for Fiscal Studies has said. 

Concluding his remarks on the Autumn Statement at a briefing this morning, the think tank boss said: "The truth is we just got a lot poorer. We are in for a long, hard, unpleasant journey; a journey that has been made more arduous than it might have been by a series of economic own goals. 

"Mr Hunt appears to have recognised this. After years of cakeism, his colleagues, the opposition, and we the voters need to take that fact on board too."

Paul Johnson, the director of the Institute for Fiscal Studies, said "middle England is set for a shock" as living standards fall in the next two years. 

He told a briefing on the Autumn Statement this morning: "The most striking figures in the OBR report are those pertaining to living standards, as measured by Real Household Disposable Income per person. Down 7% over this year and next, much the biggest fall in living memory and off the back of very poor income growth for many years. 

"This will hit everyone. But perhaps it will be those on middling sorts of incomes who feel the biggest hit. They won’t benefit from the targeted support to those on means-tested benefits. Their wages are falling and their taxes are rising. Middle England is set for quite a shock."

The two-year delay to implementing the new cap on social care costs could sound the "death knell" for the reforms, the director of the Institute for Fiscal Studies has suggested. 

Paul Johnson told a briefing on the Autumn Statement this morning: "It is awful that the social care reforms will not now be implemented next year as planned. 

"I rather fear that another two-year delay amounts to a death knell for these vital changes. Government should not be making and then reneging on promises like this which matter so much to vulnerable people."

The Government's pending numbers should be "taken with a very large pinch of salt", Paul Johnson has argued. 

The director of the Institute for Fiscal Studies said: "Beyond the next two years all the spending numbers should be taken with a very large pinch of salt... if kept to they will mean cuts, if modest ones, to most public services. 

"It is unlikely these spending plans will actually be kept to. Indeed, I would be willing to wager a considerable sum that spending will turn out higher than planned – as it literally always does."

Paul Johnson, the director of the Institute for Fiscal Studies think tank, said the Autumn Statement has brought in a "new era" of higher taxes and higher spending.  

He said: "With defence spending cuts off the table, an ageing population, and pressures everywhere else you look, my guess is we have started a new era of higher taxation and higher spending as a fraction of national income and hence a bigger state."

He added: "I would be most surprised if the tax burden gets back down to its long term pre-Covid average at any time in the next several decades, quite honestly. Higher taxes, a bigger state, look to me to be here to stay unless something quite radical changes."

The nation "just got a whole lot poorer" as a result of the Autumn Statement, according to Paul Johnson, the director of the Institute for Fiscal Studies. 

He said "that is the central fact that underlies most of what we heard".

Highlighting the "extraordinary scale of expected spending on debt interest" in the coming years, Mr Johnson said: "It looks like doubling relative to forecasts and hitting £100 billion a year by the end of the forecast period. That’s more than spending on any public service bar the NHS."

Paul Johnson, the director of the Institute for Fiscal Studies think tank, said the tax burden is going to hit its "highest sustained level in history" as a result of the Autumn Statement. 

He told a briefing this morning: "Borrowing is going to be relatively high into the foreseeable future. Tax is going to be very high indeed. It will settle at its highest sustained level in history relative to national income."

Sarah Olney, the Liberal Democrats' Treasury spokeswoman, said the "already squeezed middle are being pushed to the brink" by the tax rises in the Autumn Statement. 

"Those working day-in, day-out are having to choose between food or heating, mortgage payments or fuel for their car," she said.

"The squeezed middle will continue to work as hard as before, but their efforts will be worth significantly less as disposable income shrinks. Every single Conservative MP should be ashamed of this cost of chaos budget, which will leave a legacy of economic turmoil and tax misery as mortgage rates spiral."

The Resolution Foundation think tank said Jeremy Hunt’s public spending cuts do not appear to be achievable, saying unprotected departments would face George Osborne-style austerity.

Research director James Smith: "They don’t look obviously deliverable. If you take the spending cuts that are in place and subtract out the protected departments like health and defence, you end up with really big falls in those unprotected departments."

He said unprotected departments would face "2014/15 levels of austerity".

"Hard to see how given the legacy of austerity, given public sector wages are already lagging behind and given this is effectively tying the hands of governments, it’s really hard to see how those will be delivered," he added.

Jeremy Hunt said he has "great confidence" that in the coming years the UK will be able to "remove the vast majority" of trade barriers it has with the EU. 

Asked if membership of the single market would boost growth, the Chancellor told BBC Radio 4’s Today programme: "I think having unfettered trade with our neighbours and countries all over the world is very beneficial to growth.

"I have great confidence that over the years ahead we will find outside the single market we are able to remove the vast majority of the trade barriers that exist between us and the EU. It will take time."

Pressed on the single market again, he said: "I don’t think it’s the right way to boost growth because it would be against what people were voting for when they supported Brexit which was to have control of our borders and membership of the single market requires free movement of people. So I think we can find other ways that will more than compensate for those advantages."

Jeremy Hunt has insisted the Tories will introduce the delayed cap on social care costs if they win the next general election.

The Chancellor told BBC Radio 4’s Today programme said: "It’s not disappearing into the ether, but I agree it’s a source of great regret to me.

"I believe it will happen if the Conservatives win the next general election."

Jeremy Hunt, the Chancellor, said "sound money matters more than low taxes" as he defended the tax hikes included in his Autumn Statement. 

He told the BBC Radio 4 Today programme: "I have actually asked wealthier people to pay more. As a Conservative all tax rises are difficult for me because I think we should be moving to a low tax economy. 

"But I have made the choice that in the end sound money matters more than low taxes."

He added: "The other things of course you do as soon as you can and that is what I will hope to do to bring down taxes when we can manage to do it."

Jeremy Hunt said it would not have been possible to raise the required extra money in taxes to stabilise the public finances just by focusing on the wealthiest in society. 

Told that middle income Britain is being squeezed as a result of the Autumn Statement, the Chancellor told the BBC: "It is not possible to raise £25 billion of taxes just focusing on a very small group of very rich people and I am being very open about that. 

"What we are doing with this package, it is a very balanced package, is to ask people who have more to contribute more but also a big package to support people on the lowest incomes, big increases in the national living wage, the triple lock for pensioners, big help with people’s fuel bills next year and support for the NHS and schools. 

"So we want to take these difficult decisions in a fair way that shows people that, yes, we are doing what we need to do to right the ship in a very difficult storm, but we are also looking after the most vulnerable people…"

Jeremy Hunt was asked if her accepted that his Autumn Statement amounted to a tax "raid" on millions of working people. 

He told BBC Radio 4's Today programme: "No, it is a plan that gets us through very difficult times that are being faced by other countries all over the world and it gives people certainty."

Rachel Reeves said Labour would face a "difficult fiscal inheritance" if it wins the next general election because of the state of the UK's finances. 

She said: "Even if you have a difficult fiscal inheritance, and we know that a Labour Government will have that due to the choices the Conservatives have made, you can still make different choices and prioritise different things."

Sir Andrew Dilnot, the architect of the original plans for a cap on social care costs, said there is "no excuse" for the Government deciding to delay implementing the reforms (see the post below at 08.08).

He told the BBC: "With that [new social care] funding in place I think this could have been implemented for October 2023.

"The Department for Health and Social Care certainly believed they were on track to do that but even if extra time was needed certainly an extra two years weren't needed, an extra few months might have been felt to be needed by some county councils, there's no excuse for delaying this for two years."

Sir Andrew said that given that the reforms have already been agreed by parliament, the decision to delay implementation "looks surprisingly close to retrospective taxation". 

He said: "We have an in principle rule that we don't do retrospective taxation. Taking away a promise of sypport that has been made by parliament, passed through Parliament, given the royal assent, looks surprisingly close to retrospective taxation and I think it is just unfair." 

Rachel Reeves, said she does not "doubt" the accuracy of the Office for Budget Responsibility's economic forecasts. Some Tory MPs have argued that the watchdogs modelling often proves to be incorrect. 

But Labour's shadow chancellor told BBC Radio 4’s Today programme: "I’ve always said that we’ve got a real respect for the economic institutions, from the Bank of England, where I used to work, to the Treasury to the Office for Budget Responsibility.

"So I don’t doubt that their forecasts are correct."

Rachel Reeves, the shadow chancellor, accused the Tories of hitting ordinary workers "time and time again" with tax rises instead of focusing on those with the "broadest shoulders". 

She told Sky News: "Instead of just coming time and time again to the ordinary working man and woman asking them to pay more in taxes I would have liked to see more from those with the broadest shoulders."

The Office for Budget Responsibility set hares running yesterday after it included a big hike to fuel duty, apparently pencilled in for next March, in its economic modelling. 

That prompted speculation that the Government intended to hit motorists at the pump to the tune of as much as an extra 12p a litre.

Jeremy Hunt has now clarified the situation, telling BBC Breakfast: "Let me clear that up, that is not Government policy, we’ll make a decision on that at the next budget in the spring. That was just an assumption that the OBR made."

One of the more controversial decisions announced by Jeremy Hunt yesterday was the move to delay the implementation of social care reforms - including a new cap on costs - for two years. 

The Chancellor said this morning that the decision was not "easy” for him and it was something he “passionately did not want to do”.

He told BBC Breakfast: "I don’t pretend this was an easy thing for me to do given what I said in 2013 but it does mean we can give overall a bigger increase to social care than it’s ever had in its history.

"Some of those decisions are very hard for me as Chancellor. I’m a Conservative Chancellor that has put up taxes, I’ve had to delay those Dilnot reforms to social care which is something I passionately did not want to do.

"But I’m doing it because we face an international economic crisis and I recognise that people are worried about the future and I’m prepared to do difficult things even if they’re things I wouldn’t personally choose to do, because they’re the right thing for the country.”

Jeremy Hunt said he is "not guilty" of bottling the difficult decisions by putting off some spending cuts until after the next general election.

The Chancellor told BBC Breakfast: "I mean you can accuse me of many failings but looking at the front pages of the newspapers today, to say we have ducked any of the difficult decisions facing the British economy is the one charge we are not guilty of."

The Government did announce yesterday that it is extending the windfall tax on oil and gas giants from 25 per cent to 35 per cent. Meanwhile, a 45 per cent levy will be imposed on electricity generators. 

But Labour has argued that the changes do not go far enough. 

Rachel Reeves, the shadow chancellor, told BBC Breakfast: "One thing yesterday which was a big mistake of the Government was not to extend the windfall tax in the way that Labour has been arguing for because every pound left on the table on windfall tax is a pound that could be spent in easing these cost-of-living pressures that exist at the moment.

"Look, we all know there are difficult choices to be made because of the mess the Conservatives have made on the economy.

"But leaving money on the table – the windfalls of war that the energy companies are making – is making the bills higher for ordinary working families and that is unforgivable."

A Labour government would not be "able to do everything we want" when taking power because of the economic "mess" caused by the Conservatives, Rachel Reeves has said. 

Asked if a Labour government would enact delayed cuts set out by Jeremy Hunt, the shadow chancellor said: "We know because of the mess that the Conservatives have made we won’t be able to do everything we want when we want."

She added that the party would have made "different choices" than the Conservatives in the Autumn Statement. 

"We don’t know the situation that we are going to inherit and there’s no reason that it has to be as bad as this forecast yesterday," she said.

"That is why we’re urging the Government to urgently put in place those plans for growth so we have a better outlook for the UK economy, a better outlook for our public services, which are on their knees, and a better outlook for our living standards, which at the moment are predicted to decline sharply in the next two years. It doesn’t have to be this way."

Rachel Reeves, Labour's shadow chancellor, said the Government could have made "fairer choices" around taxation in the Autumn Statement. 

Speaking to BBC Breakfast, Ms Reeves said: "I think there are two key things from yesterday. The first is that fairer choices around tax could have been made. For example, the Government could have abolished the non-dom tax status because if you make Britain your home, you should be paying your taxes here and there are still too many people who are not doing that.

"But second, and perhaps most importantly, we really need a serious plan to grow our economy because there is an alternative to all of this."

Jacob Rees-Mogg, the Tory former business secretary, last night accused Jeremy Hunt of taking the "easy option" of hiking taxes. 

He told Channel 4 News: "Taxation has got too high and there are issues with the level of expenditure that we have got. I think there is a real problem with fiscal drag bringing more and more people into the 40p (tax) band who, particularly if they are living in the South of England, are not necessarily particularly well-off.

"That is going to be hard for them paying an extra level of tax on top of what they are already paying. Also freezing the basic band is going to be a burden for all taxpayers, even those who are still in receipt of benefit.

"I think we need to look at the efficiency of government to make sure money is well spent before reaching for the easy option of putting up taxes. What we actually need to be doing is having a strategy for growth and looking to lower taxes."

Is the Autumn Statement "Conservative" given that it will result in the tax burden rising to its highest sustained level since the Second World War? That is the question being pondered by many Tory MPs this morning. 

Jeremy Hunt, the Chancellor, defended his plans this morning as he argued there is "nothing Conservative about ducking difficult decisions". 

He told Sky News: "Well, the Office for Budget Responsibility said yesterday that what we are doing is actually making the recession shallower. It is saving jobs. 

"But what I would say to my Conservative colleagues is there is nothing Conservative about spending money that you haven’t got. 

"There is nothing Conservative about not tackling inflation. There is nothing Conservative about ducking difficult decisions that put the economy on track. And we have done all of those things and that is why this is a very Conservative package to make sure that we sort out the economy which is one of the most important things that people expect from us as a party."

Jeremy Hunt's Autumn Statement saw taxes on workers increased. The threshold at which people pay the 45p top rate of income tax was lowered from £150,000 to £125,140 while a range of tax allowances were frozen. 

The Chancellor was asked this morning if he believes it pays to go to work under his plans. He said the Government is "not pretending that this isn’t going to be a difficult time for everyone". 

He told Sky News: "Well, we have just increased the national living wage to £10.42, that is nearly 10 per cent increase and that is precisely to make sure we do reward people for working and support people who are on lower pay. 

"So I think we are very aware of those challenges. We are not pretending that this isn’t going to be a difficult time for everyone. 

"But what we have is a plan, we are protecting the NHS and schools as we get through a difficult period and when we get to the other side you can see inflation coming trite down, growth going right up, unemployment coming down, all the things, they are economic statistics but they actually affect ordinary families up and down the country."

Jeremy Hunt insisted the Government is "doing the right thing for the long term" by hiking taxes and cutting public spending now. 

The Chancellor told Sky News: "This is a plan which when you cut through the difficult decisions that I announced yesterday, it brings inflation right down, you start to see growth going right up and you start to see our economy getting back onto an even keel and that is the most important thing. 

"As a Conservative I know sometimes you have to take difficiult decisions but if in the end that means more stability for families and we are protecting the NHS and schools as you said then we know we are doing the right thing for the long term."

Good morning and welcome to today's politics live blog. 

Jeremy Hunt is on the morning broadcast round for the Government as he defends his Autumn Statement. 

The Chancellor's tax rises and spending cuts lived up to gloomy expectations yesterday and he is now on the airwaves arguing why he believes he has made the right decisions. 

The Autumn Statement fallout is set to dominate proceedings in Westminster today and I will guide you through the key developments.