The government will also be rolling back its energy bills help
Liz Truss’ financial plan has been completely ripped up after Jeremy Hunt announced that the government will perform an almost-complete u-turn on the tax cuts and policies it announced in its mini-budget last month.
The new chancellor, who took over from the sacked Kwasi Kwarteng on Friday, confirmed in a statement to the nation that almost all the tax measures in the mini-budget will be reversed.
Hunt has now scrapped plans to cut the basic rate of income tax from 20p in the pound to 19p from April next year.
He said it is not right to borrow to fund this tax cut. The rate will remain indefinitely at 20p until economic circumstances allow it to be cut, he says.
The measure was announced by former chancellor Kwasi Kwarteng in September’s mini-budget – he said it would benefit more than 31 million people.
MORE U-TURNS
Jeremy Hunt will throw out almost all tax measures in Kwasi Kwarteng's mini-budget.
Liz Truss's flagship energy support package will now only run until April '23 instead of two years. pic.twitter.com/nwtztZ1jxB
— PoliticsJOE (@PoliticsJOE_UK) October 17, 2022
Hunt also said that a Treasury-led review will take place into how people are helped with energy bills from April next year.
Although support will stay in place for this winter, Liz Truss had previously guaranteed it would be in place for two years.
The Chancellor said the aim was to design a new approach to save taxpayers money while targeting support to those most in need.
BREAKING: Chancellor Jeremy Hunt says he is reversing "almost all" of the tax cuts announced in his predecessor's mini-budget, and is scaling back support on energy bills.
Listen to his statement in full
https://t.co/PHyVSZ9VrH
Sky 501, Virgin 602, Freeview 233, YouTube pic.twitter.com/ZGgUwP4YVA
— Sky News (@SkyNews) October 17, 2022
He said: “We will continue with the abolition of health and social care levy and the stamp duty change, off payroll working reforms, the new VAT-free shopping scheme for non-UK visitors and the freeze on alcohol duty rates.”
The chancellor argued the plans will avoid uncertainty ahead of the full fiscal plan announcement at the end of the month.
It will deliver confidence and stability, he added.
The announcement has torn up almost all of Liz Truss’ financial plans that she said she would implement during her leadership campaign.
The Chancellor will address MPs in a statement to the House of Commons later this afternoon.
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