CHAOTIC TORY GOVERNMENT LURCHES FROM CRISIS TO CRISIS
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DEFIANT TRUSS CLINGS ON – FOR NOW
Suella Braveman’s scathing resignation letter:
Prime Minister’s response:
If the resignation of another senior government minister was serious enough, worse was to follow on a chaotic evening at Westminster as Tory whips were accused of bullying and physically manhandling MPs over a crucial vote on fracking.
Both the Chief Whip and Deputy Chief Whip resigned – or maybe they didn’t.
Chaos. Utter chaos.
At time of writing Liz Truss remains in post as Prime Minister, clinging on despite her authority collapsing around her. Whether she will still be there this evening is anyone’s guess.
The central responsibility of any government is to do what is necessary for economic stability.
Behind the decisions we take and the issues on which we vote are jobs families depend on, mortgages that have to be paid, savings for pensioners, and businesses investing for the future.
We are a country that funds our promises and pays our debts.
And when that is questioned, as it has been, this government will take the difficult decisions necessary to ensure there is trust and confidence in our national finances.
That means decisions of eye-watering difficulty.
But I give the House and the public this assurance: every single one of those decisions…
…whether reductions in spending or increases in tax, will prioritise the needs of the most vulnerable.
That is why I pay tribute to my predecessors for the Energy Price Guarantee, for the furlough scheme…
…and indeed for even earlier decisions to protect the NHS budget in a period when other budgets were being cut.
Mr Speaker, I want to be completely frank about the scale of the economic challenges we face.
We have had short term difficulties caused by the lack of an OBR forecast alongside the mini-budget…
…but there are also inflationary and interest pressures around the world.
Russia’s unforgivable invasion of Ukraine has caused energy and food prices to spike.
We cannot control what is happening in the rest of the world, but when the interests of economic stability mean the government needs to change course, we will do so – and that is what I have come to the House to announce today.
In my first few days in this job, I’ve held extensive discussions with the Prime Minister, Cabinet colleagues, the Governor of the Bank of England, the OBR, the head of the Debt Management Office, Treasury officials, and many others.
The conclusion I have drawn from those conversations is that we need to do more, more quickly, to give certainty to the markets about our fiscal plans.
And show through action, not just words, that the United Kingdom can and always will pay our way in the world.
We have therefore decided to make further changes to the mini budget immediately, rather than waiting until the Medium-Term Fiscal Plan in two weeks’ time, in order to reduce unhelpful speculation about those plans.
Mr Speaker I am very grateful for your agreement on the need to give the markets an early, brief summary this morning, but I welcome the opportunity to give the House details of the decisions now.
We have decided on the following changes to support confidence and stability.
Firstly, the Prime Minister and I agreed yesterday to reverse almost all the tax measures announced in the Growth Plan three weeks ago that have not been legislated for in Parliament.
So we will continue with the abolition of the Health and Social Care Levy, changes to Stamp Duty, the increase in the Annual Investment Allowance to £1 million, and the wider reforms to investment taxes.
But we will no longer be proceeding with:
The cut to dividend tax rates, saving around £1 billion a year.
The reversal of the off-payroll working reforms introduced in 2017 and 2021, saving around £2 billion a year.
The new VAT-free shopping scheme for non-UK visitors, saving a further £2 billion a year.
Or the freeze to alcohol duty rates, saving around £600 million a year.
I will provide further details on how those rates will be uprated, shortly.
Second, the Government is currently committed to cutting the basic rate of income tax to 19% in April of 2023.
This government believes that people should keep more of the money they earn, which is why we have continued with the abolition of the Health and Social Care Levy.
But at a time when markets are asking serious questions about our commitment to sound public finances, we cannot afford a permanent, discretionary increase in borrowing worth £6 billion a year.
So I have decided that the basic rate of income tax will remain at 20% – and it will do so indefinitely, until economic circumstances allow for it to be cut.
Taken together with the decision not to cut Corporation Tax, and restoring the top rate of income tax, the measures I’ve announced today will raise around £32 billion every year.
The third step I’m taking today, Mr Speaker, is to review the Energy Price Guarantee.
This was the biggest single expense in the Growth Plan and one of the most generous schemes in the world.
It is a landmark policy for which I pay tribute to my predecessor.
It will support millions of people through a difficult winter and will reduce inflation by up to 5%.
So I confirm today that the support we are providing between now and April next year will not change.
But beyond next April, the Prime Minister and I have agreed it would not be responsible to continue exposing the public finances to unlimited volatility in international gas prices.
So I am announcing today a Treasury-led review into how we support energy bills beyond April next year.
The review’s 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.
There remain many difficult decisions to be announced in the Medium-Term Fiscal Plan on October 31st …
…when I confirm that we will publish a credible, transparent, fully costed plan to get debt falling as a share of the economy over the medium term…
…based on the judgement and economic forecasts of the independent Office for Budget Responsibility.
I would like to thank the OBR, whose director Richard Hughes I met this morning, and the Bank of England whose Governor Andrew Bailey I have now met twice.
I fully support the vital, independent roles both institutions play, which give markets, the public, and the world confidence that our economic plans are credible, and rightly hold us to account for delivering them.
But I want some more independent, expert advice as I start my journey as Chancellor.
So I am announcing today the formation of a new Economic Advisory Council to do just that.
The Council will advise the government on economic policy with the first four names announced today:
Rupert Harrison, former Chief of Staff to the Chancellor of the Exchequer,
Gertjan Vlieghe, Element Capital
Sushil Wadhwani, Wadhwani Asset Management
Karen Ward, J. P. Morgan
Mr Speaker,
We remain completely committed to our mission to go for growth, but growth requires confidence and stability – which is why we are taking many difficult decisions, starting today.
But while we do need realism about the challenges ahead, we must never fall into the trap of pessimism.
Despite all the adversity and challenge we face, there is enormous potential in this country.
We have some of the most talented people in the world.
Three of the world’s top ten best universities.
The most tech unicorns in Europe.
One of the world’s great financial centres.
Incredible strengths in the creative industries…
…in science, research, engineering, manufacturing, and innovation.
All that gives me genuine optimism about our long-term prospects for growth.
But to achieve that, it’s vital that we act now to create the stability on which future generations can build.
The reason the United Kingdom has always succeeded is because at big and difficult moments we have taken tough and difficult decisions in the long-term interests of the country. That is what will we now do.
And I commend this statement to the House.
Hunt statement fails to undo damage to families and businesses and leaves more uncertainty, says TUC
Commenting on the Chancellor Jeremy Hunt’s fiscal statement), TUC General Secretary Frances O’Grady said: “The Conservatives drove the UK economy over a cliff. Hunt slamming the gears into reverse now won’t help families and businesses already hit by soaring borrowing costs.
“People needed reassurances today. Instead, they got more uncertainty – about energy bills, about our public services, and about whether universal credit and benefits will rise with inflation.
“We are now on the brink of a deep and damaging recession that threatens millions of jobs. But the latest Conservative Chancellor still has the same basic approach that got us into this mess.
“The Chancellor should have announced a boost to universal credit and pensions, and a comprehensive plan to get wages rising faster for everyone. And he should have announced a much higher windfall tax on oil and gas giants.”
On the announcement of a review of support for families and businesses with energy costs beyond April 2023, she added:
“Families and businesses now face months of worry. There is going to be less help with bills – but no-one knows who will lose out, by how much, or whether there will finally be a programme to fix Britain’s cold and draughty homes. This is not the reassurance working families need.”
The Chancellor will make a statement at 11am, bringing forward measures from the Medium-Term Fiscal Plan that will support fiscal sustainability.
He will also make a statement in the House of Commons this afternoon.
This follows the Prime Minister’s statement on Friday, and further conversations between the Prime Minister and the Chancellor over the weekend, to ensure sustainable public finances underpin economic growth.
The Chancellor will then deliver the full Medium-Term Fiscal Plan to be published alongside a forecast from the independent Office for Budget Responsibility on 31 October.
The Chancellor met with the Governor of the Bank of England and the Head of the Debt Management Office last night to brief them on these plans.
That racket you hear is those infamous Mini-Budget economic plans being put through the shredder – Ed. …
UPDATE: The Chancellor of The Exchequer Jeremy Hunt has today, Monday 17 October, brought forward a number of measures from 31 October’s Medium-Term Fiscal Plan:
Changes designed to ensure the UK’s economic stability and provide confidence in the government’s commitment to fiscal discipline
Basic rate of income tax to remain at 20% until economic conditions allow for it to be cut, IR35 and dividend tax rate reforms no longer going ahead
Treasury-led review of energy support after April 2023 launched
Following conversations with the Prime Minister, the Chancellor has taken these decisions to ensure the UK’s economic stability and to provide confidence in the government’s commitment to fiscal discipline.
The Chancellor made clear in his statement that the UK’s public finances must be on a sustainable path into the medium term.
Today’s announcement represents another down payment following the reversal of the corporation tax cut announced on Friday 14 October by the Prime Minister. The Chancellor will publish the government’s fiscal rules alongside an OBR forecast, and further measures, on 31 October.
In his statement the Chancellor announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in parliament.
The following tax policies will no longer be taken forward:
Cutting the basic rate of income tax to 19% from April 2023. While the government aims to proceed with the cut in due course, this will only take place when economic conditions allow for it and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely. This is worth around £6 billion a year.
Cutting dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase, which took effect in April 2022, will now remain in place. This is valued at around £1 billion a year.
Repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will now remain in place. This will cut the cost of the government’s Growth Plan by around £2 billion a year.
Introducing a new VAT-free shopping scheme for non-UK visitors to Great Britain. Not proceeding with this scheme is worth around £2 billion a year.
Freezing alcohol duty rates from 1 February 2023 for a year. Not proceeding with the freeze is worth approximately £600 million a year. The next steps of the Alcohol Duty Review announced in Growth Plan 2022 will continue as planned. The alcohol duty uprating decision and interactions with the wider reforms to alcohol duties under the Alcohol Duty Review will be considered in due course.
This follows on from the previously announced decisions not to proceed with the Growth Plan proposals to remove the additional rate of income tax and to cancel the planned increase in the corporation tax rate.
Taken together, these changes are estimated to be worth around £32 billion a year.
The government’s reversal of the National Insurance increase and the Health and Social Care Levy, and the cuts to Stamp Duty Land Tax, will remain benefitting millions of people and businesses. The £1 million Annual Investment Allowance, the Seed Enterprise Investment Scheme and the Company Share Options Plan will also continue to further support business investment.
Energy bills support review
The government has announced unprecedented support within its Growth Plan to protect households and businesses from high energy prices. The Energy Price Guarantee and the Energy Bill Relief Scheme are supporting millions of households and businesses with rising energy costs, and the Chancellor made clear they will continue to do so from now until April next year.
However, looking beyond April, the Prime Minister and the Chancellor have agreed that it would be irresponsible for the government to continue exposing the public finances to unlimited volatility in international gas prices.
A Treasury-led review will therefore be launched to consider how to support households and businesses with energy bills after April 2023. The objective of the review is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need. The Chancellor also said in his statement that any support for businesses will be targeted to those most affected, and that the new approach will better incentivise energy efficiency.
The government is prepared to act decisively and at scale to regain the country’s confidence and trust. The Chancellor stated in his speech that there will be more difficult decisions to take on both tax and spending. This means doing what is needed to lower debt in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.
In light of this, government departments will be asked to find efficiencies within their budgets. The Chancellor is expected to announce further changes to fiscal policy on 31 October to put the public finances on a sustainable footing.
Further information
Table of total benefit of tax policy reversals:
Policy (£bn)
2022-23
2023-24
2024-25
2025-26
2026-27
Re-instate plans to raise Corporation Tax to 25% from April 2023
+2.3
+12.4
+16.6
+17.6
+18.7
Suspend 1p reduction in the basic rate of income tax
0
+5.3
+5.9
+5.8
+5.9
Maintain additional rate of income tax
+2.4
-0.6
+0.8
+2.2
+2.1
Maintain 1.25 percentage point increase in dividends tax rates
0
+1.4
-1.0
+1.1
+0.9
Maintain 2017 and 2021 reforms to off-payroll working rules (also known as IR35)
0
+1.1
+1.4
+1.7
+2.0
Cancel VAT-free shopping scheme for non-UK visitors to Great Britain
0
0
+1.3
+2.0
+2.1
Cancel one year freeze to alcohol duty rates
+0.1
+0.5
+0.6
+0.6
+0.6
Total
+4.7
+20.1
+25.4
+30.9
+32.3
Costings in the table are as set out in the Growth Plan 2022 – except for the 1p reduction in the basic rate of income tax, which is the costing from Spring Statement 2022 as adjusted in the Growth Plan 2022. Final costings will be set out as part of the Medium-Term Fiscal Plan on 31 October. Totals may not sum due to rounding.
THE CHANCELLOR’s STATEMENT:
A central responsibility for any Government is to do what is necessary for economic stability.
This is vital for businesses making long-term investment decisions and for families concerned about their jobs, their mortgages, and the cost of living.
No government can control markets, but every government can give certainty about the sustainability of public finances and that is one of the many factors influencing how markets behave.
And for that reason, although the Prime Minister and I are both committed to cutting corporation tax on Friday she listened to concerns about the mini budget and confirmed we will not proceed with the cut to Corporation Tax announced.
The government has today decided to make further changes to the mini budget.
And to reduce unhelpful speculation about what they are, we have decided to announce these ahead of the Medium-Term Fiscal Plan, which happens in two weeks.
I will give a detailed statement to Parliament and answer questions from Members of Parliament.
But because these decisions are market sensitive, I have agreed with the Speaker the need to give an early, brief summary of the changes which are all designed to provide confidence and stability.
Firstly, 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 cut 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.
Secondly, the government’s current plan is to cut the basic rate of income tax to 19% from April 2023.
But at a time when markets are rightly demanding commitment to sustainable public finances, it is not right to borrow to fund this tax cut.So I have decided that the basic rate of income tax will remain at 20% and it will do so indefinitely, until economic circumstances allow for it to be cut.
Taken together with the decision not to cut Corporation Tax, and restoring the top rate of income tax the measures I’ve announced today will raise, every year, around £32bn.
Finally, 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 am 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.
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 value of pensions.
There will be more difficult decisions to take 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.
But growth requires confidence and stability, and the United Kingdom will always pay its way.
This Government will therefore make whatever tough decisions are necessary to do so.
REACTION:
Commenting on the Chancellor Jeremy Hunt’s fiscal statement today (Monday), TUC General Secretary Frances O’Grady said: “The Conservatives drove the UK economy over a cliff. Hunt slamming the gears into reverse now won’t help families and businesses already hit by soaring borrowing costs.
“People needed reassurances today. Instead, they got more uncertainty – about energy bills, about our public services, and about whether universal credit and benefits will rise with inflation.
“We are now on the brink of a deep and damaging recession that threatens millions of jobs. But the latest Conservative Chancellor still has the same basic approach that got us into this mess.
“The Chancellor should have announced a boost to universal credit and pensions, and a comprehensive plan to get wages rising faster for everyone. And he should have announced a much higher windfall tax on oil and gas giants.”
On the announcement of a review of support for families and businesses with energy costs beyond April 2023, she added: “Families and businesses now face months of worry. There is going to be less help with bills – but no-one knows who will lose out, by how much, or whether there will finally be a programme to fix Britain’s cold and draughty homes. This is not the reassurance working families need.”
Director of Policy & Communications at Independent Age, John Palmer, said: “Older people living on low and modest incomes were hoping to be reassured today, but frustratingly the Chancellor’s statement posed more questions than answers.
“Instead of ensuring stability, today only provided uncertainty. The review of the Energy Price Guarantee is extremely concerning. It’s no longer clear who will receive support beyond April 2023. Now millions of older people are wondering if they will be abandoned by the government and left with unaffordable energy bills and freezing homes next year.
“We know that many people in later life are already making dangerous cutbacks on heating and food. Our own polling revealed that 65% of older people plan to use less heating this winter.
“The government must ensure that its new targeted approach from next year helps older people in financial hardship, including the 850,000 older people who are currently entitled to Pension Credit but do not receive it.
“A fundamental, non-negotiable way to help older people’s incomes keep up with the price of essentials is for the government to uprate benefits and the State Pension with inflation. Today was another missed opportunity to offer this reassurance. Instead, millions of people over 65 will continue to live in fear that they will be made even poorer, when their budgets have been broken by the cost-of-living crisis.”
Will Hodson, consumer champion and founder of How To Save It commented:‘The Chancellor’s announcement that the Government will review the energy price cap in April is welcome. Supporting millionaires in paying their energy bills for two years was both morally and economically wrong.
“However, many households will be concerned about what this change means for them. The Government needs to make sure that their support is both good value to the taxpayer and provides sufficient, targeted support to those who really need it.’
the UK will provide an additional £10 million of life-saving humanitarian support for Pakistan’s flood relief efforts
Lord (Tariq) Ahmad of Wimbledon, UK Minister of State for South Asia (FCDO), arrives in Pakistan today [Friday 14 October]
the Minister will meet with key government counterparts, community leaders, and aid agencies to discuss the response to the humanitarian crisis and long-term recovery for the country
The UK is providing further humanitarian support to Pakistan following the devastating floods that have killed over a thousand people and affected more than 33 million.
As part of a visit to the country, FCDO Minister Lord (Tariq) Ahmad of Wimbledon has today announced a further £10 million of humanitarian aid, bringing the UK Government’s total contribution to £26.5 million.
The extra support will be spent on urgent life-saving needs such as providing shelter, water and sanitation to prevent waterborne diseases. It will focus on supporting people who are still displaced and those that are returning to their land, by helping re-establish communal water supplies.
During his visit to Pakistan, Lord Ahmad will meet the Prime Minister, Foreign Minister and other government counterparts to discuss the impact of the floods, visit the areas most affected and speak with key UK-funded aid agencies on the ground in Sindh.
UK Minister of State for South Asia, FCDO, Lord (Tariq) Ahmad of Wimbledon said: “The UK continues to help the people of Pakistan recover from the recent devastating floods.
“Our support will help to tackle the spread of waterborne diseases and to improve access to clean water, sanitation, medical care and shelter across the country.
“We are working night and day with Pakistan and our international partners to ensure that UK aid reaches the hardest hit areas.
“As well as helping with urgent life-saving needs, the UK is supporting Pakistan’s economic recovery and resilience against future climate disasters.
“The UK’s new Developing Countries Trading Scheme will help grow trade by giving duty-free access to 94% of goods exported from Pakistan to the UK.”
In addition to the UK’s £26.5 million donation in humanitarian funding, a UK Royal Air Force flight recently delivered eight boats and ten portable generators for use in flood relief operations.
As well as discussing the floods, the Minister will also use this visit to raise the need for strong international support for Ukraine following Russia’s illegal annexation of sovereign territory, and reaffirm the strong people-to-people links between the UK and Pakistan in the context of the 75 year anniversary of Pakistan’s independence.
According to Pakistan’s National Disaster Management Agency, the flooding in Pakistan has destroyed or damaged 2 million houses, with 546,000 people now living in relief camps. The disaster has also damaged 12,716 km of roads and 22,000 schools. In total, 745 health centres have been damaged or destroyed
today’s announcement takes the total UK contribution to the floods response to £26.5 million. £21.5 million is going to the relief efforts in the areas worst-hit by the flooding. The remaining £5 million will go directly to the Disasters Emergency Committee Pakistan Floods Appeal, after the UK government match funded pound for pound the first £5 million of DEC donations by the UK public. Further donations can be made at www.dec.org.uk or by calling 0330 678 1000
British Airways and Virgin Atlantic are offering free relief shipments, in their cargo, of any aid goods being sent from the UK to Pakistan
the DEC appeal has notably been supported by the England men’s cricket team, who were touring Pakistan for the T20s last month, with the team making a personal donation which was then matched by the England Cricket Board
CHANCELLOR Kwasi Kwarteng has been sacked, carrying the can for the ill-judged ‘mini-budget’ which has caused economic turmoil since it was announced three weeks ago today.
‘I’m going nowhere’ Kwarteng, Prime Minister Liz Truss’s choice as Chancellor, was recalled from an IMF meeting in Washington DC this morning to be told the news.
Prime Minister Liz Truss will desperately hope that the departure of close ally Kwarteng will appease the markets. She made the following brief statement confirming a humiliating U-turn this afternoon:
Good afternoon,
My conviction that this country needs to go for growth is rooted in my personal experience.
I know what it’s like to grow up somewhere that isn’t feeling the benefits of growth.
I saw what that meant and I am not prepared to accept that for our country.
I want a country where people can get good jobs, new businesses can set up and families can afford an even better life.
That’s why from day one I’ve been ambitious for growth.
Since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth.
I want to deliver a low tax, high wage, high growth economy.
It’s what I was elected by my party to do.
That mission remains.
People across this country rightly want stability.
That is why we acted to support businesses and households with their energy costs this winter.
It’s also the case that global economic conditions are worsening due to the continuation of Putin’s appalling war in Ukraine.
And on top of this, debt was amassed helping people through the Covid pandemic.
But it is clear that parts of our mini budget went further and faster than markets were expecting. So the way we are delivering our mission right now has to change.
We need to act now to reassure the markets of our fiscal discipline.
I have therefore decided to keep the increase in corporation tax that was planned by the previous government. This will raise £18 billion per year.
It will act as a down-payment on our full Medium-Term Fiscal Plan which will be accompanied by a forecast from the independent OBR.
We will do whatever is necessary to ensure debt is falling as a share of the economy in the medium term.
We will control the size of the state to ensure that taxpayers’ money is always well spent.
Our public sector will become more efficient to deliver world-class services for the British people.
And spending will grow less rapidly than previously planned.
I met the former Chancellor earlier today. I was incredibly sorry to lose him. He is a great friend and he shares my vision to set this country on the path to growth.
Today I have asked Jeremy Hunt to become the new Chancellor.
He is one of the most experienced and widely respected government ministers and parliamentarians.
And he shares my convictions and ambitions for our country.
He will deliver the Medium-Term Fiscal Plan at the end of this month.
He will see through the support we are providing to help families and businesses including our Energy Price Guarantee that’s protecting people from higher energy bills this winter.
And he will drive our mission to go for growth, including taking forward the supply side reforms that our country needs.
We owe it to the next generation to improve our economic performance to deliver higher wages, new jobs and better public services, and to ease the burden of debt.
I have acted decisively today because my priority is ensuring our country’s economic stability.
As Prime Minister, I will always act in the national interest.
This is always my first consideration.
I want to be honest, this is difficult. But we will get through this storm.
And we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.
Kwarteng’s replacement – and the UK’s fourth Chancellor in a tumultuous 2022 – is none other than veteran former health secretary Jeremy Hunt.
Hunt supported Rishi Sunak – who’s predictions on the economy have been proved painfully accurate – in the recent Tory leadership election.
Hunt himself was an early casualty in the recent Tory leadership election and was also once voted as the most unpopular front-line politician of all time!
Clearly another popular choice … what could possibly go wrong?
HM Treasury issued the following statement this evening:
Government update on Corporation Tax
The Prime Minister has set out that the way the government is delivering on its mission to achieve a low tax, high wage, high growth economy is to change.
The legislated increase in the Corporation Tax rate from April 2023 will go ahead, with most small businesses benefitting from the new small profits rate.
Chancellor Jeremy Hunt will deliver the Medium-Term Fiscal Plan on 31 October, detailing action to get debt falling as a percentage of GDP over the medium term.
The government has today [Friday 14 October] announced that Corporation Tax will increase to 25% from April 2023 as already legislated for, raising around £18 billion a year and acting as a down payment on its full Medium-Term Fiscal Plan.
The decision has been taken in recognition of the need to ensure the UK’s economic stability and reassure markets of its commitment to fiscal discipline, after elements of September’s Growth Plan went further and faster than markets were expecting.
The Prime Minister has set out that the government is prepared to do whatever is necessary to ensure debt is falling as a share of the economy in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.
The previously announced small profits rate of Corporation Tax will be maintained. Smaller or less profitable businesses will not pay the full 25% rate, and companies with less than £50,000 of profit – the large majority – will not see any increase at all, continuing to pay Corporation Tax at 19%.
The UK’s corporate tax regime will remain competitive and supportive of growth at the 25% rate, continuing to be the lowest rate in the G7. As part of the forthcoming tax review, the government will look at how the tax system can go further to promote growth and investment.
The government is committed to growing the economy and taking forward supply-side reforms that will ignite strong and sustained growth that delivers prosperity for the UK.
Chancellor of the Exchequer Jeremy Hunt will set out the government’s Medium-Term Fiscal Plan on 31 October, alongside a full forecast from the independent Office for Budget Responsibility.
Director of health and wellbeing company falsely claimed £30,000 Bounce Back Loan for personal gain during pandemic
Monica Coyle, 51, from Kilmarnock has been disqualified as a director for 10 years after fraudulently claiming a £30,000 government Bounce Back Loan (BBL).
Coyle, a former NHS nurse, was director of Positive Pulse Limited, a health and wellbeing company which provided health checks to employees of businesses. She had also been president of business and professional women’s group Ayrshire Business Women in 2019.
Coyle applied for the Bounce Back Loan in May 2020 after the Covid-19 pandemic impacted her business.
She falsely declared turnover of £130,000 in her application, rather than the actual turnover of her business, which was less than £5,000.
As a result, Coyle received a BBL of £30,000, of which she spent over £26,000 on personal use.
Bounce Back Loans were earmarked for small to medium sized companies impacted by Covid-19, and the loans were designed to support the company, rather than for the director’s own gain.
Positive Pulse Limited went into Creditors Voluntary Liquidation in February 2022, owing £30,000 to the bank, in respect of the BBL.
The Secretary of State accepted a disqualification undertaking from Monica Coyle, after she did not dispute that she caused the company to apply for, and receive, a BBL of £30,000 which the company was not entitled to, following which she received personal gain.
Her ban is effective from 16 September 2022 and will last for 10 years.
The disqualification undertaking prevents Monica Coyle from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.
Investigation Manager Steven McGinty said: ‘Bounce Back Loans were made for the economic benefit of the company, not for directors’ personal gain.
‘Monica Coyle exploited the scheme and took taxpayers’ money during the pandemic which she knew she was not entitled to.’
Environmental campaigners have reacted angrily to the UK Government plans to increase exploration for new oil and gas fields despite the devastating climate impacts of burning fossil fuels.
They accused politicians of ‘sticking two fingers up’ to scientists calling for an end to fossil fuels to protect the climate. Climate science and energy experts have repeatedly warned that any new oil and gas projects will push the world well past dangerous climate limits.
The North Sea Transition Authority confirmed today that they will invite companies to apply for over 100 licences to explore for more fossil fuels in the North Sea.
The UK Committee on Climate Change said earlier this year that the timeline from the issuing of an exploration licence to production commencing ranges from under a decade to several decades, with an average of around 28 years.
First Minister Nicola Sturgeon opposed the controversial Cambo oil field last year, and has since recognised that oil and gas is not a solution to the current price crisis, but has so far stopped short of opposing the Jackdaw or Rosebank fields.
Friends of the Earth Scotland’s Oil and Gas campaigner Freya Aitchison said: “By encouraging greedy fossil fuel companies to keep looking for more fossil fuels, the UK Government is denying the reality of the climate emergency.
“It is sticking two fingers up to climate scientists and energy experts who have made it clear that there should be no new oil and gas if we are to remain within agreed climate limits.
“The devastating climate impacts people are enduring with floods in Pakistan, Hurricane Ian in the US and the scorching heatwave in the UK are being driven by burning fossil fuels. The UK Government clearly doesn’t care about the impact its decisions will have on vulnerable people and communities around the world.
“Instead of new fossil fuels, we urgently need a transition to an energy system powered by renewables, and a mass rollout of energy efficiency measures to reduce energy demand. With the cost of living skyrocketing due to the volatile prices of oil and gas, it’s obvious that our current energy system is completely unfit for purpose, serving only to make oil company bosses and shareholders richer while everyone else loses out. ”
On the Scottish Government’s role:
“The Scottish Government must be willing to stand up to these reckless plans to expand fossil fuels in the North Sea. These announcements risk locking us into a climate-destroying energy system for decades to come, entrenching reliance on this volatile industry in places like Aberdeen, and leaving people all across Scotland exposed to rocketing energy bills.”
On the ‘Climate Compatibility Checkpoint’:
“The UK government’s supposed checkpoint is a worthless charade as there can be no climate compatible new oil and gas. It is a deeply cynical attempt to provide cover for reckless plans to expand the very industry that is fuelling both the climate and the cost of living crises.
Prime Minister Liz Truss met European leaders at Prague summit in show of unity against Russian aggression
Prime Minister pays tribute to “collective resolve” to oppose Russian aggression
UK agrees new regional energy cooperation and progress on Sizewell C nuclear development at Prague summit
Ministers to take forward enhanced operational cooperation to address migrant crisis
Prime Minister Liz Truss has welcomed the strong show of unity against Russian tyranny at the summit of European leaders yesterday, as the UK secures new commitments on energy and migration.
Convening 44 leaders from across the continent, the meeting in Prague reaffirmed the steadfast resistance to Russia’s aggression.
In a meeting with French President Macron, both leaders confirmed their full support for the new nuclear power station at Sizewell C and committed to take all necessary steps to finalise investment decisions within the next month, progressing the next generation of the UK’s nuclear power.
The UK and France will ramp up wider cooperation on civil-nuclear development ahead of a planned UK-France Summit in 2023, working together on issues including new innovation, infrastructure and workforce training.
Czech Prime Minister Petr Fiala also confirmed plans to renew the UK’s participation in the North Seas Energy Cooperation group, which supports the construction of wind farms and interconnectors in the region. The Prime Minister used the summit to push for the development of new, next-generation hybrid interconnectors in the North Sea to accelerate renewable energy capacity.
Prime Minister Liz Truss said: “Leaders leave this summit with greater collective resolve to stand up to Russian aggression. What we have seen in Prague is a forceful show of solidarity with Ukraine, and for the principles of freedom and democracy.
“The UK will continue to work with our allies to deliver on the British people’s priorities, including ending our reliance on authoritarian regimes for energy and reducing costs for families, tackling people smuggling gangs, and standing up to tyrants.”
The Prime Minister also discussed the benefits of energy partnerships with Norwegian Prime Minister Jonas Støre, highlighting today’s announcement from London-based firm Neptune Energy that it will increase gas production at the Duva field as a successful example. Gas from Norway’s Duva subsea field serves households in the UK.
On migration, the UK Prime Minister agreed with President Macron and Dutch Prime Minister Rutte to intensify cooperation on tackling illegal migration. The UK and France confirmed that their interior ministers would conclude an ambitious package of measures to address pernicious people smuggling gangs in the Channel this autumn.
The Prime Minister also attended the closing plenary session and dinner at the European leaders’ summit last night.
Over 8 million households are set to receive an additional £324 as part of the government’s Cost of Living support package
The £324 Cost of Living Payment, which follows on from a £326 payment made from July, is part of £1,200 support package for millions this year
The £150 Disability Cost of Living Payment was provided in September, with a £300 additional pensioner payment to come in the Winter
Millions of households across the UK will receive a £324 cost of living cash boost by the 23 of November.
The government has today announced that households receiving DWP benefits will receive the second part of the £650 Cost of Living Payment from 8 November and continuing through to the 23 November.
Over 8 million families have already received the first Cost of Living Payment, worth £326, which was sent out from 14 July this year.
The second payment will automatically be paid into the bank accounts of those eligible in England, Scotland, Wales and Northern Ireland who receive a qualifying benefit, meaning they will not need to do anything to receive the money.
Work and Pensions Secretary, Chloe Smith said: “Millions of families will soon see a £324 cash boost as part of our extensive £1,200 support package, helping to raise incomes and manage the rising cost of living.
“We understand that people are struggling which is why and we’re committed to supporting the most vulnerable households. That’s also why we are focused on driving growth and delivering quality public services so we can continue to support those in need through these challenging times while boosting opportunity for all.”
Chancellor of the Exchequer, Kwasi Kwarteng added: “We know that people have been worried about their bills ahead of this winter, which is why we’ve taken decisive action to hold down energy bills, saving the average household around £1,000 a year, and provided £1,200 of targeted support to the most vulnerable.
“Without our intervention, analysts were predicting that the average annual energy bill could have reached £6,500 next year. We were never going to let this happen.
“Our Growth Plan will also leave more money in people’s pockets and, over the longer term, help drive economic growth – the only way to permanently boost everyone’s living standards.”
The DWP will pay a small number of payments on the 8 November, with numbers increasing significantly from the 9 November. Even if you are not on a qualifying DWP benefit you may still be eligible for the £324 payment as HMRC are also making payments to those who receive tax credits and no other eligible benefits. These will be paid shortly after DWP payments and customers do not need to contact the government or apply for the payment at any stage.
This payment comes on top of extensive government support with the cost of living this winter, including around 6 million disabled people having been paid a separate £150 Disability Cost of Living Payment, whilst over 8 million pensioner households will receive an extra one-off £300 Winter Fuel Payment this year.
This is in addition to an extension to the Household Support Fund, which is providing an extra £421 million for use between October and March to help vulnerable people with the essentials.
More businesses to be categorised as small businesses, meaning less red tape
Move will potentially exempt tens of thousands of the UK’s growing businesses from relevant future regulations, saving them thousands of pounds
Start of a sweeping package of reforms to cut red tape for business and stimulate growth
Thousands of the UK’s fastest-growing businesses will be released from reporting requirements and other regulations in the future, as part of plans aimed at boosting productivity and supercharging growth, Prime Minister Liz Truss announced yesterday.
Currently, small businesses are presumed to be exempt from certain regulations. However, many medium sized businesses – those with between 50 and 249 employees – still report that they are spending over 22 staff days per month on average dealing with regulation, and over half of all businesses consider regulation to be a burden to their operation [source].
The Prime Minister has announced plans to widen these exemptions to businesses with fewer than 500 employees for future and reviewed regulations, meaning an additional 40,000 businesses will be freed from future bureaucracy and the accompanying paperwork that is expensive and burdensome for all but the largest firms.
The exemption will be applied in a proportionate way to ensure workers’ rights and other standards will be protected, while at the same time reducing the burden for growing businesses.
Regulatory exemptions are often granted for SMEs, which the EU defines at below 250 employees. However, we are free to take our own approach and exempt more businesses to those with under 500 employees. We will also be able to apply this to retained EU law currently under review, which we would not have been able to do without our exit from the EU.
The changed threshold will apply from today (Monday 3 October) to all new regulations under development as well as those under current and future review, including retained EU laws. The Government will also look at plans to consult in the future on potentially extending the threshold to businesses with 1000 employees, once the impact on the current extension is known.
This is the first step in a package of reforms to ensure UK business regulation works for the UK economy. The reforms will harness the freedoms the UK has since leaving the EU to remove bureaucratic and burdensome regulations on businesses, while streamlining and making it easier for them to comply with existing rules, ultimately saving them valuable time and money.
