The new Chancellor Jeremy Hunt has announced that he is scrapping nearly all of the measures announced less than a month ago in Liz Truss’ mini budget
In a statement this morning he confirmed that he will reverse “almost all” of tax cuts announced in mini-budget apart from NICS and stamp duty and scrap the1p tax cut in basic rate while the energy support package will only last until April and not the two year as planned
The biggest single expense in growth plan was the energy price guarantee. This is a landmark policy supporting millions through difficult winter” said Hunt who said that after six months, there will be a review and the help will become more targeted
“There will be more difficult decisions I’m afraid on both tax and spend.” he said adding that:
“All departments will need to redouble their efforts to find savings and some areas of spending will need to be cut. But as I promised at the weekend, our priority in making the difficult decisions that lie ahead will always be the most vulnerable and I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.
“But growth requires confidence and stability and the United Kingdom will always pay its way. This Government will therefore take whatever tough decisions are necessary to do so.”
The chancellor has reversed more than £32bn of tax cuts.
“The most important objective for our country right now is stability. Governments cannot eliminate volatility in markets but they can play their part and we will do so because instability effects the prices of things in shops, the cost of mortgages and the values of pensions.” he said concluding his statement
Reacting to the statement Chris Fletcher, Policy & Campaigns Director at Greater Manchester Chamber of Commerce, said: “The virtually full reversal of all the policies announced in last month’s mini-budget illustrates the chaos that is engulfing government at present. With only the cut to NICs still intact and fundamental changes to or scrapping of all other measures, the mini-budget has definitely been binned along with a fair proportion of the PM’s credibility and authority.
“From the current Chancellor’s statement it sounds like more cuts are to come to balance the books – one of the main reasons for the markets’ adverse reaction to the original budget – and many will be waiting on further details as to what these look like. With the speed of reaction that we are currently seeing it will be obvious very quickly if this is enough to convince the markets, business and voters that the government really has got control of the economy.”
Meanwhile Think Tank IPPR North said
“Whilst chaos reigns in Westminster, here on the ground in the North and across the country, people are exhausted by financial uncertainty. Soaring mortgage rates, rising rents and the erosion of real wages are everyday worries. Too many are struggling to keep their heads above water.
“It is no surprise that the government has had to reverse swathes of its ‘mini budget’ announcements today. Borrowing to fund tax cuts for the wealthy is not sustainable, fair or how you grow the economy.
“Despite the government now going into hard reverse on most of its plans, they’re still not clear on whether they can stick to the basics. Promises like the delivery of Northern Powerhouse Rail in full, and investment in our vital public services must not be rolled back. This would be devastating to communities across the North and totally undermine the UK economy.
“This is the moment for clarity, stability and shoring up commitments that protect the most vulnerable, across the whole country, whilst the wealthiest should step up – we are yet to see such assurances”.
