New U.K. Finance Minister Drops Almost All of Tax-Cut Plan
Last edited Mon Oct 17, 2022, 08:10 AM - Edit history (4)
Source: New York Times
LONDON -- Britain's new chancellor of the Exchequer, Jeremy Hunt, said on Monday that he would reverse virtually all the government's planned tax cuts, sweeping away Prime Minister Liz Truss's free-market economic plan in a desperate bid to steady the financial markets and stabilize her government.
Mr. Hunt also announced that the government would end its massive state intervention to cap energy prices next April, replacing it with a still-undefined program that he said would promote energy efficiency, but that could increase uncertainty for households facing rising gas and electricity bills. Ms. Truss's Conservative government had planned to announce the tax and spending details of its fiscal plan on Oct. 31, but with the markets still gyrating, Mr. Hunt rushed forward the schedule.
His announcement constituted one of the most dramatic reversals in modern British political history. "A central duty for any government is to do what's necessary for economic stability," Mr. Hunt said in a televised statement. "No government can control markets but every government can give certainty about the sustainability of public finances." Among the new details, Mr. Hunt said the government would shelve a reduction in the basic income tax rate, the centerpiece of a tax-cutting plan that Ms. Truss had promised would reignite Britain's economic growth.
She had earlier scrapped a tax cut for high-income people and a reduction in corporate taxes. The pound and British government bonds rallied in the run-up to the announcement, suggesting that the news could buy Ms. Truss a few days of breathing space, though her political survival, after only six weeks in office, remained in deep doubt. Mr. Hunt's hastily scheduled announcement came three days after Ms. Truss ousted his predecessor, Kwasi Kwarteng, and reversed another major tax cut, shredding her agenda and staining her credibility.
Read more: https://www.nytimes.com/2022/10/17/world/europe/uk-jeremy-hunt-fiscal-plan-budget.html
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