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Hunt warns this week’s budget is ‘no time for rabbits’ as he prepares for tough cuts to plug £55bn black hole

Chancellor Jeremy Hunt has warned there will be no rabbits in the upcoming budget, describing himself as “Scrooge who is going to do things that make sure Christmas is never cancelled”.

Mr Hunt spoke to The Sunday Times ahead of Thursday’s autumn statement, which is likely to see a number of tough measures taken to plug a £55bn black hole.

He said: “I think it’s fair to say this is going to be the first rabbit-free budget for very many years.

“I’m sorry to disappoint but, no, this is not going to be a time for rabbits, I’m afraid.”

Last week, figures showed the economy contracted by 0.2% between July and September – if GDP also shrinks in the current quarter, the country will officially be in recession.

The Bank of England has said the recession could last for two years – the longest since reliable records began in the 1920s.

Mr Hunt said he will publish forecasts from the Office for Budget Responsibility on Thursday which are “likely to present a similar picture”.

“… the question is not really whether we’re in recession, but what we can do to make it shorter and shallower,” he added.

According to the Times report, Mr Hunt is expected to announce:

• The freezing of thresholds and personal allowances for income tax, national insurance, VAT, inheritance tax and pension for a further two years beyond what was set out by Mr Sunak when he was chancellor
• Halving the tax-free allowance for capital gains tax
• Reducing the threshold for the 45p additional rate of income tax from £150,000 to £125,000
• The windfall tax on oil and energy companies is set to rise by 10 points to 35%, be extended by three years, and apply to electricity generators for the first time

He is also expected to confirm that average household energy bills will rise significantly, with The Sunday Times saying internal government estimates suggest this rise could be up to £600.

Liz Truss’s government guaranteed that a typical household’s energy bills would be capped at £2,500 but, from April, this guarantee is expected to be limited to pensioners and beneficiaries.

The scheme is expected to cost £60bn over six months, but Mr Hunt has committed just £20bn for its extension from April.

Mr Hunt said: “We have to be honest with people; it’s not possible to subsidise people’s energy bills indefinitely.

The Great Debate

“What I can promise people is that I will be honest about the scale of the problem, and fair in the way that I address those problems, and yes, that does mean that people with the broadest shoulders will bear the heaviest burden.

“Britain is ultimately a fair country, a compassionate country, and we want to make sure that people can pay for their fuel bills this winter… and that is going to be very challenging for people on low incomes.”