New UK Finance Minister Jeremy Hunt put the last elements of Prime Minister Liz Truss’s economic plan in the Westminster shredder on Monday, confirming there would be no tax cuts at all and the government’s energy price guarantee would end in the spring.
In a brief statement to reassure markets that the disastrous mini-budget of his predecessor Kawsi Kwarteng was now consigned to the bin, Hunt said the plan to cut the basic rate of income tax to 19p would be scrapped.
Overall, the removal of most of the mini-budget measures would raise the Treasury £32bn a year, Hunt said.
However, it was the decision to truncate Truss’s multi-billion big-ticket plan to shield consumers from soaring energy prices – ironically the one measure that had widespread electoral support – that raised eyebrows. Instead, there would be a review of the plan next April.
He also warned again of spending cuts and possible tax rises “as we deliver our commitment to get debt falling as a share of the economy over the medium term”.
“All departments will need to redouble their efforts to find savings and some areas of spending will need to be cut,” he said.
Other measures to fall under the knife included cuts to dividend tax rates, a relaxation of tax rules for self-employed people, VAT-free shopping for tourists and alcohol duty changes.
Reporting by Frank Prenesti for Sharecast.com
