Key announcements of the largely slammed mini Budget by former Chancellor Kwasi Kwarteng’s are under scrutiny by his successor Jeremy Hunt.
He has scrapped almost all the announcements previously announced and will give further details in the fiscal plan on October 31.
We look at his announcements, the U turns and what could happen next.
Energy Bills
The energy bill support scheme has been scaled back by new Chancellor Jeremy Hunt.
This was set to limit bills for the average household to £2,500. The scheme was set to be universal but Mr Hunt confirmed it will only be universal until April.
Government support for businesses is set to be introduced under the energy bill relief scheme, reducing wholesale energy costs for all UK businesses, charities and the public sector until the end of March.
Mr Hunt has since confirmed that after April: “Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.”
Bankers bonuses
Mr Kwarteng confirmed plans to get rid of the cap on bankers’ bonuses and, to reaffirm the UK’s status as the world’s financial services centre. There has been no public U-turn on this decision.
Corporation Tax
SCRAPPED: Mr Kwarteng confirmed that the planned rise in corporation tax would be cancelled, so that the UK “will have the lowest rate of corporation tax in the G20”.
PM Liz Truss said that the rate would rise to 25 per cent, instead of remaining at 19 per cent, on the day that she ousted Mr Kwarteng as Chancellor.
Alcohol Duty
SCRAPPED: The cancellation of planned alcohol duty rises and the Government will introduce VAT-free shopping for tourists.
National Insurance rise
REMAINS: Kwarteng announced in his mini Budget that the health and social care levy introduced by Boris Johnson’s government would be cancelled.
It means that the health and social care levy, and other planned rises in national insurance contributions, would be cancelled from “the earliest possible moment”, November 6.
Stamp Duty
REMAINS: Stamp duty has been cut, Mr Kwarteng told the commons: “homeownership is the most common route for people to own an asset, giving them a stake in the success of our economy and society”.
Top Rate Income Tax
SCRAPPED: Plans to cut the top rate of income tax, the 45% rate for earnings over £150,000 has been halted.
SCRAPPED: The cut the basic rate of income tax to 19p in April 2023
Other measures in the mini Budget:
SCRAPPED: Mr Kwarteng outlined his desire to make the tax system “simpler” and said he would “wind down” the Office of Tax Simplification.
– Mr Kwarteng said there will be announcements in the coming weeks that will cover “the planning system, business regulations, childcare, immigration, agricultural productivity and digital infrastructure”.
– The Government will legislate to put new conditions on unions wanting to strike, Mr Kwarteng said, so that unions have to put pay offers to a vote.
– Mr Kwarteng said he would “accelerate reforms” to the pension charge cap, so it will no longer apply to “well-designed performance fees”.
– The Chancellor announced the Government’s plans for new low-tax “investment zones”, that will allow planning rules to be relaxed and will reduce business taxes to encourage investment. There has been no further comment on these plans.
