The mini-budget took place against the backdrop of a cost of living crisis with inflation at high levels, and energy costs in particular rising sharply. See also: 2021–present United Kingdom cost-of-living crisis, Britannia Unchained, and July–September 2022 Conservative Party leadership election William Keegan, the former economics editor of The Observer, wrote that the plans outlined in the statement had shown a misunderstanding of Thatcherism and its attitude towards taxation. Faisal Islam, the BBC's economics editor, described the mini-budget's reversal as "the biggest U-turn in British economic history". ![]() The Daily Mail called it a "true Tory budget", while Frances O'Grady, the General Secretary of the Trades Union Congress, branded it " Robin Hood in reverse". Initial reaction to the mini-budget was mixed. The 31 October statement was moved to 17 November in order to base it on the "most accurate possible" economic forecasts, and was also upgraded to a full autumn statement. Following Truss's resignation on 25 October, her successor Rishi Sunak retained Hunt as Chancellor. Hunt subsequently reversed the majority of the tax cuts that had been outlined in the mini-budget, a decision that led to a positive market reaction. Truss then appointed Jeremy Hunt to replace him. Speculation began to mount about Truss's future as prime minister, and on 14 October she summoned Kwarteng back to the UK from a meeting of finance ministers in Washington, D.C., and asked for his resignation. HM Treasury announced plans to outline how the proposals would be costed in November, later brought forward to 31 October, alongside an independent forecast from the OBR.ĭespite continued market turbulence, and calls from Members of Parliament including members of the Conservative Party for a policy reversal, Prime Minister Liz Truss and Kwarteng maintained the proposals outlined in the mini-budget would go ahead. It urged the UK government to "re-evaluate" the proposed tax cuts. The IMF took the unusual step of issuing an openly critical response to the budget, saying it would "likely increase inequality". The mini-budget drew widespread criticism from economists, some of whom feared its reliance on increased government borrowing to pay for the largest tax cuts in 50 years could lead to a situation like the 1976 sterling crisis when the UK was forced to ask the International Monetary Fund (IMF) for a financial bailout. ![]() By the next day of trading, the pound had hit an all-time low against the US dollar. They also appeared to be concerned that no independent forecast by the Office for Budget Responsibility (OBR) had been seen. ![]() The statement was delivered against the backdrop of a cost-of-living crisis and was immediately followed by a sharp fall in the value of pound sterling against the US dollar as world markets reacted negatively to the increased borrowing required. The mini-budget was among the first measures of the Truss ministry, which had begun on 6 September. Following widespread negative response to the mini-budget, the planned abolition of the 45% tax rate was reversed 10 days later, while plans to cancel the increase in corporation tax were reversed 21 days later. Widely referred to in the media as a mini-budget (not being an official budget statement), it contained a set of economic policies and tax cuts such as bringing forward the planned cut in the basic rate of income tax from 20% to 19% abolishing the highest (45%) rate of income tax in England, Wales and Northern Ireland reversing a plan announced in March 2021 to increase corporation tax from 19% to 25% from April 2023 reversing the April 2022 increase in National Insurance and cancelling the proposed Health and Social Care Levy. On 23 September 2022, the Chancellor of the Exchequer, Kwasi Kwarteng, delivered a Ministerial Statement entitled " The Growth Plan" to the House of Commons.
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