What was in the mini-budget and what has been scrapped?
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.
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
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Truss confirms corporation tax U-turn
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
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Truss braces for tumultuous week
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
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Truss would ‘cut 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”.
Ukraine’s president is offering an olive branch to Donald Trump with a dramatic public message aimed at mending their relationship and ending Russia’s war.
Volodymyr Zelenskyy chose social media – the US leader’s favourite mode of communication – to make his point.
He did not go so far as to apologise for a fiery bust-up with Mr Trump at the Oval Office last Friday – a move that some members of the US administration have called for, even though it was the American president and his deputy JD Vance who laid into Mr Zelenskyy.
Instead, he described the encounter as “regrettable”, saying it “did not go the way it was supposed to be” and it was “time to make things right”.
Ukrainian forces fire a missile towards Russian troops near Chasiv Yar. Pic: Reuters
Most significantly though was his spelling out of a vision for the first stage of how Russia’s war with Ukraine could end.
Pushing back on false claims by Trump allies such as Elon Musk that Mr Zelenskyy wants an endless war, he said that Ukraine is committed to peace and is ready to come to the negotiating table as soon as possible.
Crucially, he said: “We are ready to work fast to end the war, and the first stages could be the release of prisoners and truce in the sky – ban on missiles, long-ranged drones, bombs on energy and other civilian infrastructure – and truce in the sea immediately, if Russia will do the same.”
Appealing to the US president’s ego, he praised Mr Trump’s “strong leadership” and repeated his gratitude for past American support – again responding to criticism from the American commander in chief and his team that he is not showing enough gratitude.
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He also said Kyiv was ready to sign a key minerals deal with Washington – something else Mr Trump is seeking.
This message appears to be an attempt by Mr Zelenskyy to steer his relationship with Mr Trump back on track and to map out his idea for an end to the war – a conflict that Ukraine did not seek but which was brought to its land by Russia’s invading forces.
Donald Trump and Volodymyr Zelenskyy at the White House on Friday, before their Oval Office bust-up. Pic: AP
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Key now will be how the US president responds.
Will Mr Zelenskyy’s expression of regret and clear wish to end the war provide enough of an off-ramp for Mr Trump to defuse the row and – for the sake of Ukraine’s ability to defend itself – switch back on the flow of military assistance to the country?
Another major factor, of course, is how Vladimir Putin reacts and whether he could countenance a limited ceasefire in a war that he started and – unlike Mr Zelenskyy – appears to have no genuine desire to halt.
Donald Trump’s 25% tariffs on goods from Mexico and Canada have come into effect, as has an additional 10% on Chinese products, bringing the total import tax to 20%.
The US president confirmed the tariffs in a speech at the White House – and his announcement sent US and European stocks down sharply.
The tariffs will be felt heavily by US companies which have factories in Canada and Mexico, such as carmakers.
Mr Trump said: “They’re going to have a tariff. So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.”
There’s “no room left” for a deal that would see the tariffs shelved if fentanyl flowing into the US is curbed by its neighbours, he added.
Mexico and Canada face tariffs of 25%, with 10% for Canadian energy, the Trump administration confirmed.
And tariffs on Chinese imports have doubled, raising them from 10% to 20%.
Canada announced it would retaliate immediately, imposing 25% tariffs on US imports worth C$30bn (£16.3bn). It added the tariffs would be extended in 21 days to cover more US goods entering the country if the US did not lift its sanctions against Canada.
China also vowed to retaliate and reiterated its stance that the Trump administration was trying to “shift the blame” and
“bully” Beijing over fentanyl flows.
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What is America’s trade position?
Mr Trump’s speech stoked fears of a trade war in North America, prompting a financial market sell-off.
Stock market indexes the Dow Jones Industrial Average and the Nasdaq Composite fell by 1.48% and 2.64% respectively on Monday.
The share prices for automobile companies including General Motors, which has significant truck production in Mexico, Automaker and Ford also fell.
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Consumers in the US could see price hikes within days, an expert has said.
Gustavo Flores-Macias, a public policy professor at Cornell University, New York, said “the automobile sector, in particular, is likely to see considerable negative consequences”.
This is due to supply chains that “crisscross the three countries in the manufacturing process” and ” because of the expected increase in the price of vehicles, which can dampen demand,” he added.
Read more:
The effects of Trump trade tariffs explained
Trump hits out at Zelenskyy again
The Trump administration is gearing up to bring in other tariffs in the coming weeks.
On 2 April, reciprocal tariffs will take effect on all countries that impose duties on US products.
He is also considering 25% tariffs on goods from the EU “very soon” after claiming the bloc was created to “screw the United States”.
A truck has collided with a bus in southern Bolivia, killing at least 31 people, according to police – just two days after a deadly crash claimed at least 37 lives.
Officers said the bus rolled some 500m (1,640ft) down a ravine after the collision on Monday, which took place on the highway between Oruro, in the Bolivian Altiplano, and the highland mining city of Potosi.
The driver of the truck has been arrested, while the cause of the accident is under investigation.
Police spokesperson Limbert Choque said men and women were among the dead, and 22 people suffered injuries.
Rescue teams operating at the site of the crash. Pic: Bolivia’s attorney general/Reuters
Bolivia’s President, Luis Arce, expressed condolences for the victims on social media: “This unfortunate event must be investigated to establish responsibilities,” he said in a post on Facebook.
“We send our most sincere condolences to the bereaved families, wishing them the necessary strength to face these difficult times.”
The crash happened between Oruro and Potosi
On Saturday morning, a crash between two buses killed more than three dozen people in the same region.
It happened between Colchani and the city of Uyuni, a major tourist attraction and the world’s largest salt flat.
People stand near the wreckage of one of the two buses involved in a crash on Saturday. Pic: Reuters/Potosi Departmental Command
Coincidentally, one of the buses was heading to Oruro, where one of the most important carnival celebrations in Latin America is currently taking place.
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More than 30 people were also killed after a bus crash on 17 February.
In that crash, police said the driver appeared to have lost control of the vehicle, causing it to drop more than 800m (2,600ft) off a precipice in the southwestern area of Yocalla.
Bolivia’s mountainous, undermaintained and poorly supervised roads are some of the deadliest in the world, claiming an average 1,400 fatalities every year.
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