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:
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What was pledged?
• The government pledged that the 45% higher rate of income tax would be abolished.
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• 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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1:37
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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3:05
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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5:01
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”.
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.
Image: .
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.
Image: Minck, a French search and rescue ship, shadows the boat
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.
Image: Sky’s Adam Parsons at the scene
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.
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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.
Donald Trump and a leading figure in the Israeli army have suggested a ceasefire in Gaza could be close.
Eyal Zamir, chief of staff of the Israel Defence Forces (IDF), told Israeli media that “conditions were created to advance a deal” to bring about an end to the conflict in the coastal territory, and the release of hostages.
In a televised address, he said: “We have achieved many significant results, we have caused great damage to the governance and military capabilities of Hamas.
“Thanks to the operational power that we have demonstrated, the conditions have been created to advance a deal to release the hostages.”
‘This week, or next’
It comes as the US president hosts Israeli Prime Minister Benjamin Netanyahu in Washington DC on a prolonged visit this week.
Mr Trump said his meetings with Mr Netanyahu were focused “on Gaza for the most part”.
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He said: “I think we have a chance [of a ceasefire] this week, or next week.”
However, the US leader added: “Not definitely,” saying nothing was certain about the situation in Gaza.
Image: Donald Trump speaks, as Pete Hegseth looks on, during a dinner with Israeli Prime Minister Benjamin Netanyahu.
Pic: Reuters
Image: Benjamin Netanyahu speaks during a bilateral dinner with Donald Trump this week.
Pic: Reuters
Hamas reiterates ‘keenness’ to end fighting
Meanwhile, Hamas has repeated its message that it is committed to the negotiations but warned of a number of sticking points despite the positive noises from senior Israeli figures.
In a statement, the militant group said: “In its keenness to succeed in the ongoing efforts, the movement [Hamas] has shown the necessary flexibility and agreed to release 10 prisoners.
“The key points remain under negotiation, foremost among them: the flow of aid, the withdrawal of the occupation from the territories of the Gaza Strip, and the provision of real guarantees for a permanent ceasefire.”
Mr Trump’s special envoy to the Middle East Steve Witkoff previously told a cabinet meeting that the anticipated ceasefire would last 60 days and involve the release of ten hostages and nine bodies.
A source close to the negotiations told Sky News that the hostage release would take place in two waves during the 60 days and was conditional on the ceasefire.
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While the politicians talk, so many people come from around the world to try to get across the Channel on small boats. But why?
Why make such a perilous crossing to try to get to a country that seems to be getting increasingly hostile to asylum seekers?
As the British and French leaders meet, with small boats at the forefront of their agenda, we came to northern France to get some answers.
It is not a new question, but it is peppered with fresh relevance.
Over the course of a morning spent around a migrant camp in Dunkirk, we meet migrantsfrom Gaza, Iraq, Eritrea, South Sudan, Sri Lanka and beyond.
Some are fearful, waving us away; some are happy to talk. Very few are comfortable to be filmed.
All but one man – who says he’s come to the wrong place and actually wants to claim asylum in Paris – are intent on reaching Britain.
They see the calm seas, feel the light winds – perfect conditions for small boat crossings.
John has come here from South Sudan. He tells me he’s now 18 years old. He left his war-torn home nation just before his 16th birthday. He feels that reaching Britain is his destiny.
“England is my dream country,” he says. “It has been my dream since I was at school. It’s the country that colonised us and when I get there, I will feel like I am home.
“In England, they can give me an opportunity to succeed or to do whatever I need to do in my life. I feel like I am an English child, who was born in Africa.”
Image: ‘England is my dream country,’ John tells Adam Parsons
He says he would like to make a career in England, either as a journalist or in human resources, and, like many others we meet, is at pains to insist he will work hard.
The boat crossing is waved away as little more than an inconvenience – a trifle compared with the previous hardships of his journey towards Britain.
We meet a group of men who have all travelled from Gaza, intent on starting new lives in Britain and then bringing their families over to join them.
One man, who left Gaza two years ago, tells me that his son has since been shot in the leg “but there is no hospital for him to go to”.
Next to him, a man called Abdullah says he entered Europe through Greece and stayed there for months on end, but was told the Greek authorities would never allow him to bring over his family.
Britain, he thinks, will be more accommodating. “Gaza is being destroyed – we need help,” he says.
Image: Abdullah says ‘Gaza is being destroyed – we need help’
A man from Eritreatells us he is escaping a failing country and has friends in Britain – he plans to become a bicycle courier in either London or Manchester.
He can’t stay in France, he says, because he doesn’t speak French. The English language is presented as a huge draw for many of the people we talk to, just as it had been during similar conversations over the course of many years.
I ask many of these people why they don’t want to stay in France, or another safe European country.
Some repeat that they cannot speak the language and feel ostracised. Another says that he tried, and failed, to get a residency permit in both France and Belgium.
But this is also, clearly, a flawed survey. Last year, five times as many people sought asylum in France as in Britain.
And French critics have long insisted that Britain, a country without a European-style ID card system, makes itself attractive to migrants who can “disappear”.
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1:48
Migrant Channel crossings hit new record
A young man from Iraq, with absolutely perfect English, comes for a chat. He oozes confidence and a certain amount of mischief.
It has taken him only seven days to get from Iraq to Dunkirk; when I ask how he has made the trip so quickly, he shrugs. “Money talks”.
He looks around him. “Let me tell you – all of these people you see around you will be getting to Britain and the first job they get will be in the black market, so they won’t be paying any tax.
“Back in the day in Britain, they used to welcome immigrants very well, but these days I don’t think they want to, because there’s too many of them coming by boat. Every day it’s about seven or 800 people. That’s too many people.”
“But,” I ask, “if those people are a problem – then what makes you different? Aren’t you a problem too?”
He shakes his head emphatically. “I know that I’m a very good guy. And I won’t be a problem. I’ll only stay in Britain for a few years and then I’ll leave again.”
A man from Sri Lanka says he “will feel safe” when he gets to Britain; a tall, smiling man from Ethiopia echoes the sentiment: “We are not safe in our home country so we have come all this way,” he says. “We want to work, to be part of Britain.”
Emmanuel is another from South Sudan – thoughtful and eloquent. He left his country five years ago – “at the start of COVID” – and has not seen his children in all that time. His aim is to start a new life in Britain, and then to bring his family to join him.
He is a trained electrical engineer, but says he could also work as a lorry driver. He is adamant that Britain has a responsibility to the people of its former colony.
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