After a period of extraordinary tax policy volatility in the autumn of 2022 (when previously announced tax increases were abandoned and tax cuts announced followed in short order by most of the reversed tax increases being reinstated and the recently announced tax cuts abandoned) the government will be hoping for a period of calm in 2023.
Rishi Sunak and Jeremy Hunt came to office because of a loss of political and market confidence and Hunt’s emergency statement of 17 October followed by his Autumn Statement of 17 November were designed to reassure the markets of the government’s fiscal credibility whilst not overly antagonising Conservatives MPs concerned about the rising tax burden.
It is a challenging balancing act. The government raised taxes (principally through fiscal drag but also a big windfall tax and a lower starting point for the additional rate of income tax) and had it done anything...
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