Jeremy Hunt’ statement to the Commons yesterday afternoon, expanded on the brief statement he made for the benefit of the financial markets yesterday morning.
Mr Hunt clarified the measures he intended to keep from the Mini-Budget on the 23 September, and those that would not proceed.
The measures that will be KEPT from the Mini Budget are:
- The abolition of the Health and Social Care Levy
- The changes to Stamp Duty
- The increase in Annual Investment Allowance to £1 million and the wider reforms to investment taxes
The measures that will NOT proceed:
- The cut to dividend tax rates
- The reversal of the off-payroll working reforms introduced in 2017 and 2021
- The new VAT-free shopping scheme for non-UK visitors
- The freeze to alcohol duty
- The cut in the basic rate of income tax to from 20% to 19% in April 2023
- The cut to Corporation Tax in April 2023
- The abolition of the 45p top rate of income tax
The Chancellor also announced a review of the Energy Price Guarantee. He confirmed that the support would remain as planned until April 2023, but beyond that date a new approach would be needed, that would be less costly for the taxpayer, support those most in need and incentivise energy efficiency. Any support for businesses would also be targeted.
He was clear that there would be more difficult decisions to take and these would be announced in the Medium-Term Fiscal plan on 31 October, based upon the economic forecasts of the independent Office for Budget Responsibility (OBR).
The Chancellor is committed to reducing debt as a share of the economy over the medium term and will continue to work closely with the OBR and the Bank of England. In addition he has created a new Economic Advisory Council (EAC) who will advise the Government on economic policy.
The tone of his speech remains positive. The Chancellor is optimistic about the potential for long term growth given our strengths in the creative industries, science, research, engineering, manufacturing and innovation, but tough decisions must be taken now to create the stability on which to build.