Minister braces Britain for painful tax rises and spending cuts to tackle inflation

Education Secretary Gillian Keegan
PA Wire
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A Cabinet minister on Wednesday braced Britain for painful tax rises and spending cuts to defeat runaway inflation.

Education Secretary Gillian Keegan stressed tackling double-digit inflation had to be the Government’s “number one” priority.

It comes amid speculation that Chancellor Jeremy Hunt will announce a raft of public spending cuts in the upcoming budget, alongside plans to make more workers pay the top rate of tax, as he seeks to fill a £60 billion blackhole in the public finances.

The annual inflation rate in the UK has risen to 10.1 per cent and the Bank of England has warned it is preparing to further raise interest rates.

Ms Keegan told Sky News: “There is a key message, which is you cannot spend your way out of inflation.

“The number one thing we have to do is tackle inflation.

“Otherwise whatever we do it will all be eaten up by inflation. That is the number one thing we have to do and have to achieve.”

Ministers have discussed pulling more workers into paying the top rate of tax by reducing the 45p threshold currently set for by those earning at least £150,000.

Local authorities could also be given powers to increase council tax by more than 2.99 per cent in the Autumn Statement next Thursday.

Whitehall sources said on Wendesday that nothing can be “ruled out” as Prime Minister Rishi Sunak seeks to balance the country’s finances.

It comes as hundreds of thousands of public sector workers prepare for strike action over pay.

The biggest walkout in NHS history is set to take place before Christmas.

Physiotherapists began voting on whether to take industrial action this week, midwives will be balloted on Friday and 15,000 ambulance workers are also voting on strikes.

There are ongoing strikes over pay and working conditions among rail unions and postal and communication workers, while teacher unions are also balloting.

Ms Keegan said: "I don't think there's any point in going on strike.

"I would urge the nurses to continue those discussions, but the reality is if we gave massive above-inflation rises, not only would we have to raise a lot more money, but it would actually fuel inflation.

"This is the problem. We really have to tackle inflation."

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