TEHRAN- Millions more Britons will pay more tax, following the UK Finance Minister's new economic measures, heralding a fresh wave of austerity, as civil servants announce a month of sustained industrial action in December.

The British Chancellor of the Exchequer, Jeremy Hunt, announced a wave of economic measures, pretty much reversing the path laid out during the disastrously short reign of former Conservative Prime Minister Liz Truss. 

But a leading think tank has said the British people “just got a lot poorer” with a series of “economic own goals”, and that economic recovery for the country is now much harder.

Hunt’s statement to parliament, which includes £55 billion in tax rises and spending cuts, revealed that the UK was already in a recession which is set to last for at least a year.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), says the government was “reaping the costs of a long-term failure to grow the economy”, along with an ageing population and high levels of historic borrowing.

“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,” Johnson said.

Speaking to the media, the IFS director says a large amount of the financial calamity facing households has been caused by the energy crisis (as a result of sanctions on Russian gas exports) and rising inflation which is now expected to peak at 11.1% in the fourth quarter of this year.

"Investment in the UK has fallen, trade with the rest of the world has fallen," he added.

Economists say Britain is facing the biggest economic hit to living standards on record after Hunt announced the government's sweeping economic package.

Workers for different government institutions are seeing their pay growth fall behind that of private sector workers at the sharpest rate ever on record.

And in real-term costs, UK households' income that remains after the deduction of taxes and social security charges and is available to be spent or saved as one wishes will fall by 7.1% over the next two years. 

That's the lowest level since records began in 1956, according to the independent Office for Budget Responsibility.

Another prominent think tank has said the government’s new austerity budget will result in extending wage stagnation for workers to two decades as the finance ministry's tax-heavy measures pile more pressure on the nation’s middle-income households.

According to the Resolution Foundation, the dire economic outlook means that real salaries are not expected to return to levels before the 2008 financial crisis until the year 2027.

The other issue that's become even clearer in the wake of the new economic package is the extent to which certain groups - especially middle-earners - have been hit by the freezing of payroll taxes.

"Hunt’s austerity budget will extend the real wage recovery lag to 19 years. If pay had continued to grow at the same rate as before the financial crisis hit in 2008, then by 2027, workers would be £292 a week – or £15,000 annually – better off."

Figures published by the Office for Budget Responsibility said the UK was in a recession that would wipe out eight years of growth, with British households set to face the biggest fall in living standards since records began.

The Resolution Foundation said Hunt had put further pressure on the “squeezed middle” and about one in eight families – 3.3m homes in total – will be paying more than £2,000 more for energy than they did last year.

The grim assessments by a number of think tanks have raised concern among the Conservative party's own MPs ahead of the next General election that polls indicate will see many Tory members of Parliament lose their seats and a victory for the opposition Labour Party.

The measures announced by Hunt would not only affect the poor. The Resolution Foundation and the Institute for Fiscal Studies both focused on the effects that the government's measures will have on the middle class, which they termed the “squeezed middle”. As always, the rich will not be specifically concerned with the new budget.

Hunt had claimed it was "a difficult time for everyone," saying "over the next two years it is going to be challenging."

One Tory MP clinging on to a parliamentary seat traditionally held by Labour said the squeeze of those on middle incomes will only create resentment.

"Middle earners will be squeezed more than they ever have been ... people who are going to work, paying their taxes, have saved up to buy a house are being hammered from all directions – energy, food, mortgages, there's a recession looming which will affect jobs, council tax. 

"People who used to go out to restaurants and put money into the economy now struggle to get by.

"And we're telling people that taxes will be at a record high but public services won't improve? 

"Basically, the message is you're paying more and getting less."

Another Tory MP says "the country is run by two losers - Hunt lost to Boris and Rishi to Liz. 

"No wonder we are in trouble - this pair could not even win the membership votes, [they're] both millionaires, [they] don't understand ordinary people - so god help us when we have to face the people at an election."

Running scared of media scrutiny?

Amid growing public anger at austerity measures and the government's inability to control inflation, reports have emerged that the new Prime Minister Rishi Sunak is seeking to limit his cabinet ministers' appearances on the airwaves. Reports suggest there are plans to end the current procedure of senior government ministers being questioned on TV and radio every morning.

Reports indicate the government will make a minister available much less for TV or Radio interviews, switching instead to carefully planned "announcements".

The daily practice of a minister being quizzed on different UK media outlets appears to be over.

Curtailing democracy? 

While some Conservative MPs have said they would like to see the chancellor reassess some of the decisions, pointing out that "mistakes" have been made, others have warned about one announcement that will see local authorities be allowed to raise council tax by 5% without a referendum.

The UK Treasury estimates that 95% of local authorities will choose to increase council tax to the maximum amount.

Currently, local authorities are only allowed to skip a referendum if they raise the tax by 3% 

Jeremy Hunt announced he will allow local authorities to increase local council tax by up to 5% a year from April 2023 without a referendum. 

The Conservative Party MP Jonathan Gullis has added his voice of concern to the measure, as councils could previously only raise their tax by 2.99% without holding a local referendum.

Gullis says he does have concerns over his constituent’s reaction to the move in the central English city of Stoke-on-Trent saying "I do have concerns around councils. Increasing council tax in somewhere like Stoke-on-Trent by 1% brings in £900,000. 

"You aren't going to cover the black hole caused by inflation and increased demand for local services by increasing it to 5%.

"The government are simply going to have to step in and do more or people will be paying more and getting less from their local services," the MP added.

Civil servants vent anger 

Immediately after Hunt delivered his statement, civil servants at government departments announced that they will be taking part in a month of sustained industrial action from mid-December.

Members of the PCS union who work for the UK Home Office, Border Force, Department for Transport and Defra say they are seeking better pay and conditions.

Ports, borders, and all areas of transport, including driving licenses, will be affected, as some workers will be walking out for the entire month while others will take strike action for shorter periods.

PCS general secretary Mark Serwotka has noted that the exact details of the action will be announced nearer the time to give the government as little notice as possible.

He says ministers should be dealing with the causes of the dispute rather than making contingency plans saying "PCS members are angry.”

"They helped to keep this country running during the pandemic, and in return, have been treated appallingly by this government.”

He added that "with inflation now at 11.1%, it is inconceivable that they are expected to cope with yet another real term pay cut.

"With tens of thousands of members on poverty pay it is no longer about tightening belts, but about choosing between heating and eating - and that is simply not acceptable for the government's own workforce."

The union wants a 10% pay rise, pensions reform, job security and assurances that redundancy terms will not be cut.

Serwotka repeated a warning he made last month that coordinated action could be taken in the new year by joining forces with other unions, such as those representing rail workers, university lecturers, firefighters, NHS staff and Royal Mail workers.

Position of opposition parties

The leader of the main opposition Labour Party Keir Starmer has responded to Hunt's economic statement saying it has targeted working people and let the super-rich get away with "not paying their taxes in this country".

He says "we think there's massive potential in our country that's being held back because the wrong choices have been made. So, the government yesterday, having done huge damage to the economy, has gone after working people again with stealth taxes and council tax increases and done nothing about non-dom status, the super-rich is not paying their taxes in this country and they've got no plan for growth. 

Labour's Shadow chancellor Rachel Reeves told the media that Jeremy Hunt does not have the "right priorities" with his economic policies.

"I'm really worried about what's going to happen to people's living standards next year from April, big increases in gas and electricity bills." 

"Whilst the windfalls of war being made by the energy giants are still not taxed to the degree that they should be.

"We should not be having these investment allowances, which just means there are some big energy companies that aren't even paying any of this windfall tax. That's not right. 

She pointed out that "when you see some of the big companies and the very wealthiest in society getting off scot-free, I just don't think that's right. It's not the right priority."

"I do recognise that because of the mess they've made that does impose constraints on an incoming Labour government."

Reeves added it is "a badge of shame" for the government that NHS nurses who are part of the Royal College of Nursing union have voted to go on strike for the first time.

The second most powerful UK opposition party, the Liberal Democrats have said the Conservatives "should be ashamed" of themselves - noting that banks and non-dom taxpayers "got off lightly", and "the already squeezed middle are being pushed to the brink".

The party's Treasury spokesperson says "struggling families who have worked hard for years have had their security stolen by this Conservative government. 

"While non-doms and big banks got off lightly, the already squeezed middle are being pushed to the brink.

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

"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."

However, slashing money on investments, such as education and hospitals, was something also announced under the last Labour government and continued consecutive governments. 

After Brexit, the UK left the single market, one of the largest free trade markets in the world in which most trade barriers and taxes are removed. Experts have argued that has clearly backfired. So has the unwillingness to seek a peaceful resolution to the Ukraine war, which has exacerbated the UK's financial meltdown. Despite the entire world being affected by the war in terms of the global food supply crisis and the energy crisis, the UK has been among the hardest hit. 

There is also political chaos in the country which has seen three Tory prime ministers and four chancellors in a few months, with each cabinet reversing policy here and there.

As workers' wages continue to fall and their taxes continue to rise, the UK's future economic outlook looks set to get worse in the long run.