Chancellor reverses ‘almost all’ tax cuts in mini-budget and says energy bills support scheme to be scaled back

Published

3 years ago

October 17, 2022

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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.

Hunt goes further than expected – as Tory MPs say it’s ‘when not if’ Truss goes – follow latest on politics

“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.”

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.

UK

‘A constant game of cat and mouse’: Inside the crackdown on illegal moped delivery drivers

Published

35 mins ago

July 10, 2025

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'A constant game of cat and mouse': Inside the crackdown on illegal moped delivery drivers

The first thing you notice when immigration officers stop a possible illegal moped delivery driver is the speed in which the suspect quickly taps on their mobile.

“We’re in their WhatsApp groups – they’ll be telling thousands now that we’re here… so our cover is blown,” the lead immigration officer tells me.

“It’s like a constant game of cat and mouse.”

Twelve Immigration Enforcement officers, part of the Home Office, are joining colleagues from Avon and Somerset Police in a crackdown on road offences and migrants working illegally.

The West of England and Wales has seen the highest number of arrests over the last year for illegal workers outside of London.

“It is a problem… we’re tackling it,” Murad Mohammed, from Immigration Enforcement, says. He covers all the devolved nations.

“This is just one of the operations going on around the country, every day of the week, every month of the year.”

Just outside the Cabot Circus shopping complex, we stop a young Albanian man who arrived in the UK on the back of a truck.

He’s on an expensive and fast-looking e-bike, with a new-looking Just Eat delivery bag.

He says he just uses it for “groceries” – but the officer isn’t buying it. He’s arrested, but then bailed instantly.

We don’t know the specifics of his case, but one officer tells me this suspected offence won’t count against his asylum claim.

Such is the scale of the problem – the backlog, loopholes and the complexity of cases – that trying to keep on top of it feels impossible.

This is one of many raids happening across the UK as part of what the government says is a “blitz” targeting illegal working hotspots.

Angela Eagle, the border security and asylum minister, joins the team for an hour at one of Bristol’s retail parks, scattered with fast food chains and, therefore, delivery bikes.

She says arrests for illegal working are up over the last year by 51% from the year before, to more than 7,000.

“If we find you working, you can lose access to the hotel or the support you have [been] given under false pretences,” she said.

“We are cracking down on that abuse, and we intend to keep doing so.”

There are reports that asylum seekers can rent legitimate delivery-driver accounts within hours of arriving in the country – skipping employment legality checks.

Uber Eats, Deliveroo, and Just Eat all told Sky News they’re continuing to strengthen the technology they use to remove anyone working illegally.

But a new Border Security Bill, working its way through Parliament, could see companies fined £60,000 for each illegal worker discovered, director disqualifications and potential prison sentences of up to five years.

“I had them all in to see me last week and I told them in no uncertain terms that we take a very tough line on this kind of abuse and they’ve got to change their systems so they can drive it out and off their platforms,” the minister tells me.

The gig economy – so prevalent in every city – creates another incentive for those wanting to risk their lives coming to the UK illegally.

More than 20,000 migrants have crossed the English Channel to the UK in 2025 – a record number at this point of the year.

For some of those who arrive, a bike and a phone provide a way to repay debts to gang masters.

There were eight arrests today in Bristol, one or two taken into custody, but it was 12 hours of hard work by a dozen immigration officers and the support of the police.

As two mopeds are pushed onto a low-loader, you can’t help but feel, despite the best intentions, that at the moment, this is a losing battle.

UK

This flimsy vessel carrying migrants could reach British waters in a few hours’ time

Published

3 hours ago

July 10, 2025

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This flimsy vessel carrying migrants could reach British waters in a few hours' time

We see the boat from a distance – the orange of the life jackets reflected in the rising sun.

And as we draw closer, we can make out dozens of people crowded on board as it sets off from the shore, from a beach near Dunkirk.

There is no sign of any police activity on the shore, and there are no police vessels in the water.

Instead, the migrants crammed into an inflatable dinghy are being watched by us, on board a private boat, and the looming figure of the Minck, a French search and rescue ship that soon arrives.

The dinghy meanders. It’s not heading towards Britain but rather hugging the coast.

A few of the passengers wave at us cheerfully, but then the boat starts to head back towards the shore.

As it nears a different beach, we see a police vehicle – a dune buggy – heading down to meet it.

Normal practice is for French police officers to slice through the material of any of these small boats that end up back on shore.

Two police officers get out of the buggy and wait. A police helicopter arrives and circles above, performing a tight circle over the heads of the migrants.

The police think they might be about to go back on to the beach; in fact, these passengers know that most of them are staying put.

The boat stops a short distance from the shore and four people jump out. As they wade towards the beach, the boat turns and starts to head back out to sea.

We see the two police officers approach these four men and have a brief conversation.

They don’t appear to check the bags they are carrying and, if they do question them about why they left the boat, it is the most cursory of conversations.

In reality, these people probably don’t speak French but they were almost certainly involved in arranging this crossing, which is against the law. But all four walk away, disappearing into the dunes at the back of the beach.

We follow the boat as it chugs off in the direction of Britain, carrying around 50 people.

The Minck returns to shadowing its progress, but its job is limited to offering help if the boat gets into trouble.

Otherwise, if the engine keeps working, then this flimsy vessel will reach British waters in a few hours’ time.

UK

‘A constant game of cat and mouse’: Inside the police crackdown on illegal moped delivery drivers

Published

6 hours ago

July 10, 2025

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