Chancellor does a u-turn on most of the mini-budget

Jeremy Hunt has announced u-turns on most of the tax cuts listed in the recent mini-budget.

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The Chancellor has announced a u-turn on most previous pledges on tax cuts with only stamp duty and the recent rise in national insurance being cut.

Jeremy Hunt gave a televised statement in which he said the previously announced plan to cut the basic rate of income tax by 1p to 19p in April 2023 will be frozen indefinitely.

Other changes announced in the previous Chancellor Kwasi Kwarteng’s mini-budget, including cuts to dividend taxes and simplifying off-payroll working changes are being scrapped. However, plans to lift the cap on bankers’ bonuses remains. The Government had already done u-turns on corporation tax cuts and removing the 45% top rate tax level.

Hunt said the aim was to bring confidence and stability to the public finances. He also announced that the government’s scheme to cap people’s energy prices for two years would be cut from two years to six months, with a review of support after April 2023 and those most in need being prioritised.

Hunt will send proposals for public sector spending to the Office for Budget Responsibility later this week.

TUC General Secretary Frances O’Grady said families and businesses had already been hit by soaring borrowing costs.

She stated: “People needed reassurances today. Instead, they got more uncertainty – about energy bills, about our public services, and about whether universal credit and benefits will rise with inflation.

“We are now on the brink of a deep and damaging recession that threatens millions of jobs. But the latest Conservative Chancellor still has the same basic approach that got us into this mess.

“The Chancellor should have announced a boost to universal credit and pensions, and a comprehensive plan to get wages rising faster for everyone. And he should have announced a much higher windfall tax on oil and gas giants.”

On energy support, she added: “Families and businesses now face months of worry. There is going to be less help with bills – but no-one knows who will lose out, by how much, or whether there will finally be a programme to fix Britain’s cold and draughty homes. This is not the reassurance working families need.”

Child Poverty Action Group (CPAG) Chief Executive Alison Garnham said: “Families up and down the country are now terrified about how they will get through the tough times ahead. It’s frankly unthinkable that the poorest kids and families in our society will be forced to pay for the economic mistakes of this government – but today the Chancellor has given families no reassurance about how he will support them. As a bare minimum, the Chancellor must confirm urgently that all benefits will rise in line with inflation.”

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