2 yıl önce

Hunt reverses 'almost all' UK budget tax cuts Truss unveiled last month

Newly appointed UK Finance Minister Jeremy Hunt scraps tax cuts in a major policy overhaul as Liz Truss' governing Conservative party tanks in the opinion polls amid Britain's worsening cost-of-living crisis.

Reuters

Hunt says no government could control markets but stresses his action would give certainty over public finances and help secure growth.

The British government has axed almost all of its debt-fuelled tax cuts unveiled last month to avert fresh markets chaos, in a humiliating climbdown for embattled Prime Minister Liz Truss.

The shock move on Monday by new finance chief Jeremy Hunt, parachuted into the job on Friday to replace sacked Kwasi Kwarteng, leaves Truss' position in a precarious state after a series of embarrassing U-turns.

Hunt estimated the tax changes would raise about $36 billion (£32 billion) per year, after economists estimated the government faced a $68.5 billion (£60-billion) black hole.

He also warned of tough spending cuts.

The finance minister said no government could control markets - but stressed his action would give certainty over public finances and help secure growth.

"We will reverse almost all the tax measures announced... three weeks ago," Hunt said in a televised statement, conceding last month's budget from his predecessor had harmed the public purse.

"The most important objective for our country right now is stability," he added in a contrite statement, ahead of setting out further details in parliament later on Monday.

Scrapped plans

Hunt scrapped plans to axe the lowest rate of income tax, and curbed the government's flagship energy price freeze - pulling the plug in April instead of late 2024.

After April, his department will "review" its energy support package, he said.

A proposed reduction in shareholder dividend tax was also binned, along with planned tax-free shopping for tourists and a freeze on alcohol duty.

Hunt already stated that he was not taking anything off the table" amid speculation of cutbacks on areas like defence, hospitals and schools.

He met over the weekend with the governor of the Bank of England, Andrew Bailey, and the head of the Debt Management Office to discuss his plans.

In two weeks' time, Hunt will unveil his medium-term fiscal plan alongside independent economic forecasts from the Office for Budget Responsibility.

But the main opposition Labour party, riding high in the polls, said the ruling Tories had "lost all credibility".

"All the chancellor's statement underlines is that the damage has been done," said its shadow finance minister Rachel Reeves.