Jeremy Hunt statement: Chancellor warns 'more difficult decisions' ahead in medium-term fiscal plan announcement

New Chancellor Jeremy Hunt confirmed changes to many measures previously announced in the Government’s mini-budget in a televised emergency statement on Monday, October 17.

While the Government will continue with its planned cut to stamp duty and its reversal of the 1.25 percentage point increase in National Insurance contributions, the planned cut to income tax is among the measures being scrapped.

The basic rate of income tax had been due to reduce to 19p in the pound from April, but it will now remain at 20p indefinitely, the Chancellor confirmed.

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Speaking on Monday, he said: “We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.

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Jeremy Hunt statement live: universal energy bill support will only last until A...

“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 cuts 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.”

Other announcements in the Chancellor’s statement included confirmation that energy bill support for households will only last until April 2023, after which there will be a Treasury-led review into a new support approach to “cost the taxpayer significantly less”.

The energy price guarantee is the “biggest single expense” in the Government’s growth plan, he added.

Chancellor Jeremy Hunt pictured leaving 10 Downing Street on Friday, October 14. Picture: Leon Neal/Getty Images.

Government departments have also been urged by the Chancellor to “redouble their efforts” to find savings as part of the commitment to get debt falling.

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Ending his statement, Mr Hunt warned that “there will be more difficult decisions” ahead on tax and spending, but that the Government's priority will continue to be supporting the country’s most vulnerable people.

He added: “I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.”

Medium-Term Fiscal Plan measures announced by Jeremy Hunt in full

Prime Minister Liz Truss talks at a press conference in 10 Downing Street after sacking her former Chancellor, Kwasi Kwarteng. Picture: Daniel Leal - WPA Pool/Getty Images.
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A statement from HM Treasury on Monday said the changes announced by Mr Hunt in his statement are estimated to be worth around £32billion a year, when taken together.

The measures are as follows:

*Suspend 1p reduction in the basic rate of income tax

*Maintain 1.25 percentage point increase in dividend tax rates

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*Maintain 2017 and 2021 reforms to off-payroll working rules (also known as IR35)

*Cancel planned VAT-free shopping scheme for non-UK visitors to Great Britain

*Cancel one year freeze to alcohol duty rates

*Re-instate plans to raise Corporation Tax to 25% from April 2023 (previously announced)

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*Maintain additional rate of income tax (previously announced)

Mr Hunt also confirmed that the measures announced by the Government under the Energy Price Guarantee and the Energy Bill Relief Scheme to help households and businesses with bills will only continue until April next year.

A Treasury-led review will then take place to design a new approach to supporting people with their energy bills after April 2023; one which will cost the taxpayer less.

Why was Jeremy Hunt giving a statement today?

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It was confirmed earlier on Monday morning that Mr Hunt would make a statement bringing forward forward measures from the Medium-Term Fiscal Plan – due to be delivered in full on October 31 – to support fiscal sustainability.

The announcement came following a whirlwind weekend for Ms Truss’ Government, which saw calls for her to go from the top job after her previous Chancellor Kwasi Kwarteng was removed from his role on Friday.

Speaking over the weekend, Mr Hunt said “my focus is on growth underpinned by stability”.

He continued: “The drive on growing the economy is right - it means more people can get good jobs, new businesses can thrive and we can secure world class public services. But we went too far, too fast.

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"We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling but the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people."

The new Chancellor will also make a full statement to the House of Commons at around 3.30pm on Monday, where he will take questions from fellow MPs.

Meanwhile, calls continue for Ms Truss – who was announced as leader of the Conservative Party on September 5 – to be replaced as Prime Minister, or to call a general election.