Chancellor reverses ‘almost all’ tax cuts in mini-budget and says energy bills support scheme to be scaled back
Jeremy Hunt has revealed he is reversing “almost all” of the tax cuts announced in his predecessor’s mini-budget and is scaling back support on energy bills.
In an emergency statement, the chancellor said a 1p cut to income tax will be delayed “indefinitely” until the UK’s finances improve instead of being introduced in April 2023 as announced in Kwasi Kwarteng’s mini-budget three weeks ago.
Mr Hunt, who only stepped into the job on Friday, said the government’s energy price guarantee will only be universal until April – not for two years as originally planned.
After April, the scheme will be more targeted following a review into how to support people’s energy bills from that time, he said.
“The government has today decided to make further changes to the mini-budget, and to reduce unhelpful speculation about what they are, we’ve decided to announce these ahead of the medium-term fiscal plan, which happens in two weeks,” Mr Hunt said.
He said the government was reversing “almost all” the tax measures announced in the mini-budget that have not yet started going through parliament.
The new tax measures would bring in £32 billion after economists estimated the government was facing a £60bn black hole in public finances with the mini-budget announcements.
The changes Mr Hunt revealed include:
- No cuts to dividend tax rates
- Repeal of the easing of IR35 rules for the self-employed introduced in 2017 and 2021
- No new VAT-free shopping scheme for overseas visitors to the UK
- No freeze on alcohol duty rates
- Basic rate of income tax to remain at 20%, not reduce to 19% from April 2023
- Energy price guarantee only until April 2023.
Mr Hunt promised: “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.
“Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.
“The most important objective for our country right now is stability.”
As Mr Hunt revealed the tax cut reversals, the pound strengthened by more than 1.2% to 1.139 against the US dollar and UK government bonds rallied further, with yields on 30-year gilts easing back by around 10%.
Widely seen as the most powerful person in government now, Mr Hunt added that there will be “more difficult decisions” on tax and spending” and said all government departments “will need to redouble their efforts to find savings, and some areas of spending will need to be cut”.
The mini-budget tax cuts that will not be reversed as they are already going through parliament, are: Cancelling the Health and Social Care Levy tax due to take place in April 2023 and the stamp duty cut.
Ms Truss’ spokesman said Monday’s decision was taken jointly by the PM and Mr Hunt over the weekend and again admitted the mini-budget went “too far, too fast”.
But he sidestepped questions about whether Ms Truss would resign after another Tory joined those who started publicly calling for her to go over the weekend.
Sky News’ political editor Beth Rigby said this row back on the mini-budget is a major blow for Liz Truss, just six weeks into her premiership.
“The entire platform of the Truss administration is gone, is gone. It’s done,” she said.
“It’s genuinely shocking in terms of how a prime minister and her cabinet got this so wrong and had to reverse in such a dramatic way.”
“It’s not just the tax decisions in the mini-budget that the new chancellor now says are just not viable.
“He’s now saying that the policy platform, her big shock and awe announcement as it was billed in the run-up to that announcement is also just economic, not viable. And that is another body blow to the prime minister today.”
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‘We think she should go’ – Labour
Scottish First Minister Nicola Sturgeon used a news conference about Scottish independence shortly after Mr Hunt’s statement to say the government turmoil is “a self-inflicted crisis for Liz Truss” and “is humiliating in quite an unprecedented way”.
“I think the sooner this prime minister and this entire government departs office, the better that will be for everyone.” she added.
Labour’s shadow chancellor, Rachel Reeves, said Mr Hunt’s statement shows “the damage has been done” and said “this is a Tory crisis made in Downing Street, paid by working people with higher mortgage and higher borrowing costs”.
She said the Conservatives have “lost all credibility” and families will continue to endure huge costs.
“We’re still flying blind with no OBR forecasts and no clarity on the impact of their mistakes,” she added.
In a bid to calm the markets, the Treasury announced at 6am on Monday Mr Hunt was going to reveal parts of his medium-term fiscal plan – which was due to take place on 31 October.
Over the weekend, Mr Hunt promised to slow down Ms Truss’ tax cuts and said “some taxes will go up” as he worked on tearing up the mini-budget that has caused weeks of economic turmoil.
His comments were welcomed by the Bank of England’s governor, Andrew Bailey, who said there had been an “immediate meeting of minds on the importance of stability and sustainability” when he spoke to Mr Hunt on Friday.
The decision for Mr Hunt to make a statement on Monday was made after meetings between the chancellor, Ms Truss, Mr Bailey and the head of the Debt Management Office on Sunday night.
Comedy writer Bill Dare, – who worked on shows including Spitting Image and Dead Ringers – has died after an accident overseas, his agent said.
Described as a “super producer” by his peers, Dare, 64, worked on eight series of hugely popular satire puppet show Spitting Image.
Airing on ITV during the 1980s and 1990s, the show delighted in lampooning public figures including politicians, celebrities and royalty, winning BAFTAs and Emmys. It was rebooted in 2020.
Dare also created Dead Ringers, a comedy impressions show broadcast on BBC Radio 4.
He also produced The Now Show, a satirical take on the news which ran on Radio 4 from 1998 to 2024.
Dare worked on a wide range of comedy shows during his career, including the radio production of The Mary Whitehouse Experience in the late 1980s and early 1990s. He had also written several novels.
In a statement released on Monday, his agent JFL Agency confirmed he died at the weekend.
A spokesperson said: “We are shocked and greatly saddened to have to announce the death of our brilliant client Bill Dare, who died at the weekend following an accident overseas.
“Our thoughts are with his wife Lucy, daughter Rebecca, and with all of Bill’s family and friends who will be devastated by his loss.
“Bill was a truly legendary producer and writer, and his comedy instincts were second to none.”
Oasis depicted on Spitting Image in 1996. Pic: ITV/Shutterstock
Colleagues were quick to pay tribute and reflect on his talent.
Impressionist Jon Culshaw wrote on X: “It’s impossible to express the unreal sense of loss at the passing of the incredible Bill Dare. The wisest comedy alchemist and the dearest, dearest friend. Much love to Lucy and all Bill’s family and friends. We shall all miss him more than we can say.”
David Baddiel posted on the social media platform: “Just heard that the original producer of The Mary Whitehouse Experience on radio, Bill Dare, has died. Bill was an amazing creative force. I owe him much. RIP.”
Former EastEnders actress Tracy-Ann Oberman said she was “devastated” and that her “entire comedy career was down to Bill”.
She wrote: “When I was on the BBC Radio 4 rep company early on in career – I ran into Bill in the corridors – He asked if I was good at accents. I said yes.
“He cast me in a sketch show. I had to do about 15 different accents. We recorded in front of a live audience at Broadcasting House – afterwards Bill said ‘Why have I never met you – you’re going to have a big career’.
“He was incredibly loyal and supportive and really opened a path for me into the R4 comedy world and then TV having come out of the RSC and theatre it was all new. I will always be grateful. Fly high Bill.”
Comedian and writer Mark Steel wrote: “This is so grim. Bill was a compassionate hearty soul with the ability to be beautifully grumpy, a marvellously thoughtful comic mind.
“He’d argue but always listen and you’d always laugh, he made a million shows and wanted them all to matter and would have made a million more.”
Have I Got News for You writer Pete Sinclair said: “I am utterly devastated by Bill’s death. I still can’t believe it. He was a comedy genius. A hugely talented writer as well as a brilliant producer. A close friend and co-writer. I cannot begin to say how much I’ll miss him.”
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Julia McKenzie, comedy commissioner for Radio 4, said: “I am so terribly sorry to hear this tragic news and my thoughts are with Bill’s wife, family and friends.
“Bill has been a huge part of Radio 4 comedy for decades, as a writer and producer, and listeners will have heard his legendary name at the end of many of their favourite shows.
“Bill was a comedy obsessive, and very instinctive about making the funniest choices when it came to writing, directing and editing.
“He cared so much about his work that in the production booth during Dead Ringers you’d see him crouched over the script, utterly focused on the show.
“He was funny and very dry in person, amusingly cynical when he needed to be and always pushed to keep the comedy he made, and particularly satire, spiky.
“I’ve known and worked with him for 18 years and like many I can’t believe he has gone, he will leave a big hole in the comedy world and in our hearts.”
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