The UK’s new chancellor Jeremy Hunt overturned nearly all unfunded tax cuts in his predecessor’s mini-budget. Kwasi Kwarteng’s reforms provoked chaos in the market due to its significant unfunded tax cuts, among other things. 

Hunt became Finance Minister only last Friday. He already announced a reversal of virtually all the tax cuts announced in the government’s mini-budget back in September. 

https://twitter.com/hmtreasury/status/1581961347243585536?s=20&t=nTyTiMnJOBUGt83LjmAq3g

Hunt was called to the rescue in order to calm down the markets and restore the reputation of the UK’s financial decision-making.

„The government has […] decided to make further changes to the mini-budget, and to reduce unhelpful speculation about what they are, we’ve decided to announce these ahead of the medium-term fiscal plan, which happens in two weeks,” Hunt told the media. 

As the AA portal reports, the main changes included the scrapping of several elements, namely the cuts to dividend tax rates, the reforms to rules regarding the taxation of the self-employed, the VAT-free shopping scheme for foreigners visiting the UK, the freeze on alcohol duty, the planned 1% cut in the basic rate of income tax indefinitely that was scheduled for next year among other things.

Economists estimate that the new measures would not plug the gap in the public finances or undo the damage done by the government’s radical policy, but they were a move in the right direction, according to Reuters. 

Image: Twitter (Jeremy_Hunt)

Author: Sébastien Meuwissen