A new chancellor and another U-turn for Truss
Liz Truss has been basically trying to shore up the institutional framework around economic policymaking and denouncing institutions is not part of the key message that she’s been trying to deliver in the last couple of weeks.
I think it was one of the ironies of this week is that the free marketeers have basically been routed by the market, haven’t they?
They’ve realised you can’t, you can’t buck the markets. You have to take them with you and you have to explain what you’re doing and you have to show the sums add up. It’s something the Treasury has learnt the hard way over, you know, the last century or more and something Liz Truss has learnt very slowly to her cost.
Jeremy Hunt 'to water down energy bills support'
Jeremy Hunt will announce that the Government's energy price guarantee is going to be watered down, according to reports.
The guarantee is supposed to apply for two years, with help for every household, but it is now reportedly going to apply until April next year when support will then become targeted and capped.
He said: "Finally, the biggest single expense in the Growth Plan was the energy price guarantee. This is a landmark policy supporting millions of people through a difficult winter. And today I want to confirm that the support we are providing between now and April next year will not change.
"But beyond that the Prime Minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.
"So I am announcing today a Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need."
Jeremy Hunt: 'The United Kingdom will always pay its way'
Jeremy Hunt said there will be "more difficult decisions" ahead as he insisted the UK "will always pay its way".
Concluding his statement, he said: "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.
"There will be more difficult decisions, I'm afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.
"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."
Analysis: Hunt's statement nothing less than political humiliation for Liz Truss
Jeremy Hunt's emergency statement amounted to nothing less than a political humiliation for Liz Truss.
Almost all of the measures contained in the mini-Budget have either been scrapped entirely or been watered down.
That will inevitably prompt the question in Westminster of what exactly does this Government now stand for?
Mr Hunt insisted he is committed to the PM's growth plan but he has just got rid of most of the policies which Ms Truss argued would put the UK on the path to greater prosperity.
The PM and her Chancellor appear to be in very different places politically - perhaps not the best recipe for stable government.
Jeremy Hunt will announce that the Government's energy price guarantee is going to be watered down, according to reports.
The guarantee is supposed to apply for two years, with help for every household, but it is now reportedly going to apply until April next year when support will then become targeted and capped.
He said: "Finally, the biggest single expense in the Growth Plan was the energy price guarantee. This is a landmark policy supporting millions of people through a difficult winter. And today I want to confirm that the support we are providing between now and April next year will not change.
"But beyond that the Prime Minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.
"So I am announcing today a Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need."
The Chancellor said that "no government can control markets but every government can give certainty about the sustainability of public finances".
He said the Government has decided to make further changes to the mini-Budget.
Chancellor reversing 'almost all' mini-Budget tax cuts
Jeremy Hunt has announced that "almost all" of the tax cuts set out in the mini-Budget are being reversed.
He said: "We will reverse almost all the tax measures announced in the Growth plan three weeks ago that have not started parliamentary legislation.
"So whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, a new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates."
Jeremy Hunt scraps Liz Truss's plan to cut basic rate of income tax
Jeremy Hunt has announced he is scrapping "indefinitely" Liz Truss's plan to reduce the basic rate of income tax by 1p.
He said: "Secondly the Government's current plan is to cut the basic rate of income tax to 19 per cent from April 2023.
"It is a deeply held Conservative value, a value that I share, that people should keep more of the money they earn.
"But at a time when markets are rightly demanding commitment to sustainable public finances, it is not right to borrow to fund this tax cut.
"So I have decided that the basic rate of income tax will remain at 20 per cent and it will do so indefinitely until economic circumstances allow for it to be cut."
He said the Government has decided to make further changes to the mini-Budget.
Jeremy Hunt has announced that "almost all" of the tax cuts set out in the mini-Budget are being reversed.
He said: "We will reverse almost all the tax measures announced in the Growth plan three weeks ago that have not started parliamentary legislation.
"So whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, a new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates."
Jeremy Hunt has announced he is scrapping "indefinitely" Liz Truss's plan to reduce the basic rate of income tax by 1p.
He said: "Secondly the Government's current plan is to cut the basic rate of income tax to 19 per cent from April 2023.
"It is a deeply held Conservative value, a value that I share, that people should keep more of the money they earn.
"But at a time when markets are rightly demanding commitment to sustainable public finances, it is not right to borrow to fund this tax cut.
"So I have decided that the basic rate of income tax will remain at 20 per cent and it will do so indefinitely until economic circumstances allow for it to be cut."
Jeremy Hunt said there will be "more difficult decisions" ahead as he insisted the UK "will always pay its way".
Concluding his statement, he said: "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.
"There will be more difficult decisions, I'm afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.
"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."
Jeremy Hunt's emergency statement amounted to nothing less than a political humiliation for Liz Truss.
Almost all of the measures contained in the mini-Budget have either been scrapped entirely or been watered down.
That will inevitably prompt the question in Westminster of what exactly does this Government now stand for?
Mr Hunt insisted he is committed to the PM's growth plan but he has just got rid of most of the policies which Ms Truss argued would put the UK on the path to greater prosperity.
The PM and her Chancellor appear to be in very different places politically - perhaps not the best recipe for stable government.
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