Chancellor Hunt drops most of the mini-Budget
The new chancellor Jeremy Hunt has given an emergency statement on the mini-budget in an effort to reassure the financial markets amid calls for the prime minister to resign.
He will address MPs in the House of Commons at 15:30 – in which he will give a full detailed run down. The measures are from the economic plan which is due to be revealed on 31 October.
In his televised statement, Chancellor Hunt reversed almost all tax measures announced in the mini-budget three weeks ago (that have not started parliamentary legislation).
“We will continue with the abolition of health and social care levy and the stamp duty change, off-payroll working reforms, the new VAT-free shopping scheme for non-UK visitors and the freeze on alcohol duty rates.”
The health and social care levy was to be funded by a rise in National Insurance payments – which the government scrapped. This looks like one major part of the mini-budget being retained.
As well as National Insurance, the planned cut to stamp duty will go ahead.
Plans to cut the basic rate of income tax from 20p in the pound to 19p from April next year has also been scrapped.
Hunt says it’s not right to borrow to fund this tax cut. The rate will remain indefinitely at 20p until economic circumstances allow it to be cut.
The chancellor went on to say the government cannot control the markets but it can give certainty about public finances.
He says the plans he is announcing will avoid uncertainty ahead of the full fiscal plan announcement at the end of the month.
Political consequences of mini-budget reversal – Blow for Truss
The Chancellor has pretty much reversed the whole mini-budget, adding to mounting pressure for the prime minister to resign.
One thing that has been picked up on is that during Chancellor Hunt’s statement, he kept saying “I have decided” – leaving many repeating the question of who is in charge of the country right now: PM Liz Truss or Jeremy Hunt.
Hunt has attempted to become PM several times and was a Rishi Sunak supporter during the Conservative leadership race over the summer.