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 for 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 Treasury said new tax measures would bring in £32bn 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:
Advertisement
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.
‘A new approach’
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.”
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: reversing the increase in national insurance contributions 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, Angela Richardson, joined those who started publicly calling for her to go over the weekend.
‘Genuinely shocking’
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.”
Please use Chrome browser for a more accessible video player
7:20
‘We think she should go’ – Labour
‘Still flying blind’
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.
More than 6,000 prisoners have been released in Myanmar as part of an amnesty to mark the 77th anniversary of the country’s independence from Britain.
The head of Myanmar’s military government has granted amnesties for 5,864 prisoners from the Southeast Asian country, as well as 180 foreigners who will now be deported, state-run media said.
The freed inmates included just a small proportion of hundreds of political detainees locked up for opposing army rule since the military seized power from the elected government of Aung San Suu Kyi.
Myanmar’s military takeover in February 2021 was met with a huge nonviolent resistance, which has since developed into a widespread armed struggle.
The freeing of prisoners began on Saturday and in Yangon, Myanmar’s largest city, buses took detainees out of the Insein Prison. Many were met by loved ones who eagerly held up signs with their names.
If the freed inmates break the law again, they will have to serve the remainder of their sentences alongside any new ones, the terms of release state.
In another report, MRTV television said government leader Senior General Min Aung Hlaing has also reduced the life sentences of 144 prisoners to 15 years.
All other inmates’ sentences have been reduced by one sixth, apart from those convicted under the Explosive Substances Act, the Unlawful Associations Act, the Arms Act and the Counterterrorism Law – all laws which are often used against opponents of military rule.
According to rights organisation the Assistance Association for Political Prisoners, 28,096 people have been arrested on political charges since the army takeover, and 21,499 of those remained in jail as of Friday.
Zaw Min Tun, a spokesperson for the military government, told journalists those released include about 600 people prosecuted under a law which makes it a crime to spread comments that create public unrest or fear, or spread false news.
There has been no suggestion the releases include that of Myanmar’s former leader Suu Kyi, who – now aged 79 – is serving a 27-year sentence after being prosecuted for a number of politically-tinged charges.
Most of the foreigners being freed are Thai people arrested for gambling in a border town, the spokesperson added.
It is not uncommon for Myanmar to mark holidays and significant occasions with prisoner releases.
The country became a British colony in the late 1800s and regained independence on 4 January 1948.
Drive an hour outside China’s commercial capital Shanghai, and you’ll reach Elon Musk’s Tesla gigafactory.
It manufactures almost one million Tesla cars a year and produces more than half of all its cars worldwide.
But with US president-elect Donald Trump preparing to move into the White House, the relationship between his new buddy Elon Musk and the leadership of China‘s Communist Party is in sharp focus.
Shanghai has been the key to Tesla’s success, largely thanks to the city’s former Communist Party secretary, now China’s premier, Li Qiang.
Chief executive of Shanghai-based Auto Mobility Limited, Bill Russo, says: “Qiang is China’s number two person. His position in Shanghai made everything possible for Tesla.”
He added: “In 2017, China adjusted its policy guidelines for the automotive industry to allow foreign companies to own their factories in China.
Please use Chrome browser for a more accessible video player
2:34
Musk, Trump and China explained
“Tesla signed its deal in 2018, broke ground in 2019, and started producing the Model 3 in 2020.”
The factory opened at breakneck speak and in record time.
In April, Musk met Qiang in Beijing, later posting on X: “Honoured to meet with Premier Li Qiang. We have known each other now for many years, since early Shanghai days.”
The Musk-China ties go all the way to the top.
When China’s President Xi Jinping visited the US in November 2023 he met Musk, who posted: “May there be prosperity for all” – echoing the language often used by China’s government.
Musk has previously weighed into the debate over the status of Taiwan. Two years ago, he suggested tensions could be eased by giving China some control over Taiwan.
This comment incensed Taiwan’s leaders.
Chinese commentator Einar Tangen, from the Taihe Institute in Beijing, says: “If Musk had said anything else, he could face action against the Shanghai plants. He’s not going to endanger that. He’s playing both sides for his own advantage.”
What’s in it for China?
Musk needs China, and in the months to come, China may need Musk.
He could act as a well-connected middleman between the Chinese Communist Party and Trump, in the face of a potential global trade war.
“Like it or not, we are living in a world where China is the dominant player in the race to an electric future,” says Russo.
Musk pioneered the EV industry in China, but is now struggling to compete with local car brands like BYD and Nio.
“Donald Trump has never had a problem giving exceptions to friends,” Tangen says.
“It fits his personality, that he can grant pardons and give favours to the people and companies he chooses.”
Musk ‘the pioneer’
Musk is well regarded as a pioneer in China and most people speak of him highly.
Strolling along the Bund waterfront area in Shanghai, Benton Tang says: “Tesla really impacted the entire industry here.
“It pushed people to develop and improve the quality, the design and especially the price.”
Interest in the Musk family has also gripped China’s online community.
His mother, Maye Musk, frequently visits the country, where she has a huge social media following as a senior-age celebrity fashion icon and endorses several Chinese products including a mattress brand.
Her book, A Woman Makes A Plan, has been translated into Chinese and is a bestseller here.
Meanwhile, as the countdown to Trump’s inauguration gains pace, the spotlight on the president-elect’s coterie of advisers intensifies.
Did the authorities fail the victims of the New Orleans terror attack? It’s barely in question, surely.
And yet, consider the response of Superintendent Anne Kirkpatrick of New Orleans police when I asked if she’d let them down by not having an appropriate security plan.
“That’s not correct, we would disagree with that.”
“It has to be a security failure?” I suggested.
“We do know that people have lost their lives,” she responded. “But if you were experienced with terrorism, you would not be asking that question.”
With that, she was escorted away from gathered journalists by her media handlers.
Please use Chrome browser for a more accessible video player
3:11
How much of a threat does ISIS pose?
Superintendent Kirkpatrick had been holding a short news conference at the end of Bourbon Street to herald its re-opening. It was just yards from the spot where a terrorist was able to drive through a gap in a makeshift line of obstructions and accelerate towards New Year crowds.
More on New Orleans Attack
Related Topics:
Invoking “experience with terrorism” is something to ponder. What experience told authorities they had adequate protection against a vehicle attack?
What experience told them it was appropriate to have a car’s width gap in makeshift street barricades?
What experience told them to contradict the security protocols of major cities around the world when it comes to large public gatherings?
To many, the answer shouldn’t be talk of experience – it should be, simply: “Sorry.” Notably, it has seemed to be the hardest word in a series of briefings by authorities who have bristled at the notion of security failings.
I asked Jack Bech for his view. He lost his brother Martin, or ‘Tiger’ in the Bourbon Street attack. He told Sky News he watched the final moments of his brother’s life on a FaceTime call to an emergency room as doctors tried, but failed, to save him.
It’s one heartbreaking story among dozens in this city.
On security, he said: “You can’t blame them. That dude easily could have been walking through the crowd with a jacket on and a bomb strapped to his chest.”
True. But the least that might be expected is an acknowledgement of failure to stop the man who drove his weapon into the crowd because he was able to. They certainly can’t claim success.
A measure of contrition would, perhaps, help the healing in this city. Experience should tell them that, if nothing else.