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Live: Chancellor Hunt reverses many mini-budget measures in emergency statement

The new Chancellor is rushing forward measures that had been due to be announced on October 31 in a bid stabilise financial markets.

17 October 2022

New Chancellor Jeremy Hunt has issued an emergency statement to rush forward measures that had been due to be announced on October 31 in what is known as the medium-term fiscal plan.

Mr Hunt confirmed he is ditching many of the measures in the mini-budget, including the planned cut to income tax.

The Chancellor will address MPs in a statement to the House of Commons later in the afternoon.

11.35am

The pound strengthened and UK government bonds rallied further as Jeremy Hunt announced plans to reverse key policies in former chancellor Kwasi Kwarteng’s mini budget.

Sterling rebounded by more than 1.2% to 1.139 against the US dollar shortly after Mr Hunt gave his emergency statement to calm the financial markets.

Yields on 30-year government bonds, or gilts, eased back further by around 10%, as the new Chancellor set out plans to shave off billions of Government debt.

The interest on long-dated bonds hit a low of around 4.32% shortly after the first announcement.

11.30am

The Government’s main objective will be ensuring “stability”, the Chancellor said.

Indicating that some Government spending would have to be cut, Jeremy Hunt said: “The most important objective for our country right now is stability.

“Governments cannot eliminate volatility in markets but they can play their part and we will do so, because instability affects the prices of things in shops, the cost of mortgages and the values of pensions.”

11.28am

The UK will “always pay its way”, the Chancellor said.

Jeremy Hunt said: “Growth requires confidence and stability and the United Kingdom will always pay its way.

“This Government will therefore take whatever tough decisions are necessary to do so.”

11.27am

Liz Truss held a political Cabinet call at 10am to discuss the decision to scrap the mini-budget measures.

The Chancellor set out the “worsening global economic situation, with interest rates rising around the world as monetary policy returns to a sense of normality”, a No 10 source said.

Prime Minister Liz Truss
Prime Minister Liz Truss (Daniel Leal/PA)

“Because of this, the Government is adjusting its programme while remaining committed to long-term reforms to improve growth such as investment zones and speeding up infrastructure projects.”

Jeremy Hunt is expected to meet all secretaries of state this week to decide on future spending plans which will then be submitted to the Office for Budget Responsibility on Friday.

11.25am

Jeremy Hunt announced that help with energy bills for households will only last until April, with a review to find a “new approach” that will “cost the taxpayer significantly less”.

In an emergency statement, the new Chancellor said: “The biggest single expense in the growth plan was the energy price guarantee.

“This is a landmark policy supporting millions of people through a difficult winter and today I want to confirm that the support we are providing between now and April next year will not change.

“But beyond that, the Prime Minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.

“So I’m announcing today a Treasury-led review into how we support energy bills beyond April next year. 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.”

11.23am

Government spending in “some areas” will be cut, the Chancellor confirmed.

Jeremy Hunt said: “There will be more difficult decisions, I’m afraid, on both tax and spending 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.

“But as I promised at the weekend, our priority in making the difficult decisions that lie ahead will always be the most vulnerable and I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.”

11.22am

The Chancellor said he remained “extremely confident” about the country’s long-term economic prospects, but added: “Growth requires confidence and stability and the United Kingdom will always pay its way.

“This Government will therefore take whatever tough decisions are necessary to do so.”

11.21am

The basic rate of income tax will remain at 20p indefinitely, Chancellor Jeremy Hunt said.

The rate had been due to reduce to 19p from April under Kwasi Kwarteng’s mini-budget, a year earlier than Rishi Sunak had planned.

But Mr Hunt said it would now stay at 20p until economic conditions allowed a reduction.

He said: “It is a deeply held Conservative value – a value that I share – that people should keep more of the money that they earn.

“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.”

11.20am

Chancellor Jeremy Hunt said his tax cut reversals will raise some £32 billion a year as part of efforts to get the public finances back on track.

In an emergency statement, he said: “The measures I’ve announced today will raise every year around £32 billion.”

11.19am

The Government will continue with its planned cut to stamp duty and its reversal of the 1.25 percentage point increase in national insurance contributions, the Chancellor said.

11.18am

Chancellor Jeremy Hunt confirmed he is ditching many of the measures in the mini-budget, including the planned cut to income tax.

In an emergency statement, he said: “We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.

“So whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates.”

Chancellor Jeremy Hunt getting into a car at the rear of Downing Street before making his emergency statement
Chancellor Jeremy Hunt getting into a car at the rear of Downing Street before making his emergency statement (Victoria Jones/PA)

11.14am

Help with energy bills for all households will only last until April, with Jeremy Hunt announcing a review to look at a “new approach” to target support at those worst off after that.

11.12am

The Government will ditch plans for new VAT-free shopping for international tourists, Mr Hunt said.

11.11am

BREAKING: Chancellor Jeremy Hunt has announced the Government will scrap plans to reduce the basic rate of income tax from 20% to 19% in April next year, a move that had been forecast would cost the Exchequer almost £5.3 billion in 2023-24.

11.09am

Former culture secretary Nadine Dorries warned her colleagues they must support Liz Truss or bring back her predecessor Boris Johnson to avoid a general election.

She tweeted: “There is no unity candidate. No one has enough support.

“Only one MP has a mandate from party members and from the British public – a mandate with an 80 seat majority. @BorisJohnson

“The choices are simple – back Liz, if not bring back Boris or face a GE within weeks.”

11.05am

Chancellor Jeremy Hunt left 11 Downing Street at around 10.30am.

He is due to give a televised statement from inside the Treasury at around 11.15am prior to his announcement to the House of Commons this afternoon.

Chancellor Jeremy Hunt getting into a car at the rear of Downing Street, London, before making his emergency statement
Chancellor Jeremy Hunt getting into a car at the rear of Downing Street, London, before making his emergency statement (Victoria Jones/PA)

11am

Video: Jeremy Hunt to make emergency statement in bid to stabilise the markets

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