What was in the mini-budget and what has been scrapped?

Published

2 years ago

October 17, 2022

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Just over three weeks ago, then-chancellor Kwasi Kwarteng unveiled his tax-cutting mini-budget to MPs which caused economic turmoil in the UK.

Following a dramatic U-turn on a promise to abolish the 45% higher rate of income tax after backlash from the government’s own Conservative MPs earlier this month, Mr Kwarteng has now been sacked – and many of the other pledges in the mini-budget have been torn up.

On Friday, the government scrapped its decision to axe the rise in corporation tax to 25% next year.

Addressing the nation in a statement on Monday morning, newly appointed chancellor Jeremy Hunt confirmed that most of the other mini-budget proposals have also now been thrown in the bin as Prime Minister Liz Truss seeks to hold on to her premiership.

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

Here is a breakdown of what was in the government’s mini-budget at the end of September and what has changed:

Income tax:

What was pledged?

• The government pledged that the 45% higher rate of income tax would be abolished.

• There was a promise to reduce the basic rate of income tax to 19p in the pound by April 2023, meaning 31 million people would be better off by an average of £170 a year.

What has changed?

• The government rowed back on its decision to scrap the highest rate of income tax earlier this month.

• Mr Hunt said the basic rate of income tax would now “indefinitely” stay at 20p until economic conditions allowed a reduction.

“It is a deeply held Conservative value – a value that I share – that people should keep more of the money that they earn,” the new chancellor said.

“But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut.”

Corporation tax

What was pledged?

• The government said it would cancel a UK-wide rise in corporation tax which was due to increase from 19% to 25% in April.

What has changed?

• Ms Truss confirmed in a brief press conference on Friday that she was dropping this flagship policy of her leadership campaign and that corporation tax will go up from 19% to 25% in April after all.

Energy package

What was pledged?

• The government said household bills would be cut by an expected £1,000 this year with aid from the energy price guarantee and £400 grant. The energy price guarantee had been due to cap prices for two years.

What has changed?

• Mr Hunt confirmed the energy price guarantee will now end in April after which time the government will look to target help on those most in need.

IR35 rules

What was pledged?

• The government promised to “simplify” IR35 rules – the rules which govern off-payroll working. It promised to change the regulations so pensions funds can increase UK investments.

What has changed?

• Mr Hunt confirmed the government will now abandon these proposed IR35 changes.

Alcohol duty

What was pledged?

• The government said in the mini-budget that planned increases in the duties on beer, for cider, for wine, and for spirits would be cancelled.

What has changed?

• Mr Hunt confirmed this will now no longer be the case, with the price of beer, cider, wine and sprits soon rising.

Dividend tax change

What was pledged?

• The government announced in the mini-budget that from 6 April 2023, the additional rate applying to dividend income would be abolished and the 1.25% rise in the dividend rates, initially brought into force in April this year, would be reversed.

What has changed?

• Mr Hunt said the government will no longer reverse the 1.25% rise in the dividend rates.

VAT-free shopping

What was pledged?

• The government pledged VAT-free shopping for overseas visitors.

What has changed?

• Mr Hunt said this policy has now been scrapped.

Stamp duty

What was pledged?

• The government promised to cut stamp duty which is paid when people buy a property in England and Northern Ireland. It said no stamp duty would be paid on the first £250,000 of any property and no stamp duty on the first £425,000 for first-time buyers.

What has changed?

• Mr Hunt confirmed this is one of very few policies in the controversial mini-budget which will remain.

National Insurance

What was pledged?

• The government said it would reverse the recent rise in National Insurance from 6 November. Workers and employers have paid an extra 1.25% since April 2022.

What has changed?

• Mr Hunt confirmed that, like stamp duty, this policy has survived the mini-budget cull.

Bankers’ bonuses

What was pledged?

• The government announced it was scrapping rules which limit bankers’ bonuses.

What has changed?

• Mr Hunt did not mention bankers’ bonuses in his statement. But a Treasury source has told Sky News there is “no change in policy there.” They said the cap “was bad policy” adding that it “didn’t cap bankers pay and was bad for financial stability”.

World

Stock markets slump for second day running after Trump announces tariffs – in worst day for indexes since COVID

Published

4 hours ago

April 4, 2025

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Stock markets slump for second day running after Trump announces tariffs - in worst day for indexes since COVID

Worldwide stock markets have plummeted for the second day running as the fallout from Donald Trump’s global tariffs continues.

While European and Asian markets suffered notable falls, American indexes were the worst hit, with Wall Street closing to a sea of red on Friday following Thursday’s rout – the worst day in US markets since the COVID-19 pandemic.

As it happened: Worst week’s trading in five years

All three of the US’s major indexes were down by more than 5% at market close; The Dow Jones Industrial Average plummeted 5.5%, the S&P 500 was 5.97% lower, and the Nasdaq Composite slipped 5.82%.

The Nasdaq was also 22% below its record-high set in December, which indicates a bear market.

Read more: What’s a bear market?

Ever since the US president announced the tariffs on Wednesday evening, analysts estimate that around $4.9trn (£3.8trn) has been wiped off the value of the global stock market.

Mr Trump has remained unapologetic as the markets struggle, posting in all-caps on Truth Social before the markets closed that “only the weak will fail”.

The UK’s leading stock market, the FTSE 100, also suffered its worst daily drop in more than five years, closing 4.95% down, a level not seen since March 2020.

And the Japanese exchange Nikkei 225 dropped by 2.75% at end of trading, down 20% from its recent peak in July last year.

Trump holds trade deal talks – reports

It comes as a source told CNN that Mr Trump has been in discussions with Vietnamese, Indian and Israeli representatives to negotiate bespoke trade deals that could alleviate proposed tariffs on those countries before a deadline next week.

The source told the US broadcaster the talks were being held in advance of the reciprocal levies going into effect next week.

Vietnam faced one of the highest reciprocal tariffs announced by the US president this week, with 46% rates on imports. Israeli imports face a 17% rate, and Indian goods will be subject to 26% tariffs.

China – hit with 34% tariffs on imported goods – has also announced it will issue its own levy of the same rate on US imports.

Mr Trump said China “played it wrong” and “panicked – the one thing they cannot afford to do” in another all-caps Truth Social post earlier on Friday.

Later, on Air Force One, the US president told reporters that “the beauty” of the tariffs is that they allow for negotiations, referencing talks with Chinese company ByteDance on the sale of social media app TikTok.

He said: “We have a situation with TikTok where China will probably say, ‘We’ll approve a deal, but will you do something on the tariffs?’

“The tariffs give us great power to negotiate. They always have.”

World

Financial markets were always going to respond to Trump tariffs but they’re also battling with another problem

Published

8 hours ago

April 4, 2025

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Financial markets were always going to respond to Trump tariffs but they're also battling with another problem

Global financial markets gave a clear vote of no-confidence in President Trump’s economic policy.

The damage it will do is obvious: costs for companies will rise, hitting their earnings.

The consequences will ripple throughout the global economy, with economists now raising their expectations for a recession, not only in the US, but across the world.

Tariffs latest: FTSE 100 suffers biggest daily drop since COVID

Financial investors had been gradually re-calibrating their expectations of Donald Trump over the past few months.

Hopes that his actions may not match his rhetoric were dashed on Wednesday as he imposed sweeping tariffs on the US’ trading partners, ratcheting up protectionism to a level not seen in more than a century.

Markets were always going to respond to that but they are also battling with another problem: the lack of certainty when it comes to Trump.

He is a capricious figure and we can only guess his next move. Will he row back? How far is he willing to negotiate and offer concessions?

These are massive unknowns, which are piled on to uncertainty about how countries will respond.

China has already retaliated and Europe has indicated it will go further.

That will compound the problems for the global economy and undoubtedly send shivers through the markets.

Much is yet to be determined, but if there’s one thing markets hate, it’s uncertainty.

World

Court confirms sacking of South Korean president who declared martial law

Published

1 day ago

April 4, 2025

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Court confirms sacking of South Korean president who declared martial law

South Korea’s constitutional court has confirmed the dismissal of President Yoon Suk Yeol, who was impeached in December after declaring martial law.

His decision to send troops onto the streets led to the country’s worst political crisis in decades.

The court ruled to uphold the impeachment saying the conservative leader “violated his duty as commander-in-chief by mobilising troops” when he declared martial law.

The president was also said to have taken actions “beyond the powers provided in the constitution”.

Supporters and opponents of the president gathered in their thousands in central Seoul as they awaited the ruling.

The 64-year-old shocked MPs, the public and international allies in early December when he declared martial law, meaning all existing laws regarding civilians were suspended in place of military law.

After suddenly declaring martial law, Mr Yoon sent hundreds of soldiers and police officers to the National Assembly.

He has argued that he sought to maintain order, but some senior military and police officers sent there have told hearings and investigators that Mr Yoon ordered them to drag out politicians to prevent an assembly vote on his decree.

His presidential powers were suspended when the opposition-dominated assembly voted to impeach him on 14 December, accusing him of rebellion.

The unanimous verdict to uphold parliament’s impeachment and remove Mr Yoon from office required the support of at least six of the court’s eight justices.

South Korea must hold a national election within two months to find a new leader.

Lee Jae-myung, leader of the main liberal opposition Democratic Party, is the early favourite to become the country’s next president, according to surveys.