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Mini-Budget scrapped - chaos in government

ended 17. October 2022

To generate “confidence and stability” (Ground Control to Major Tom), the Chancellor Jeremy Hunt has just reversed almost all of the tax measures announced in the mini-Budget, specifically plans to reduce the basic rate of income tax from 20% to 19% in April next year. In an emergency statement, he said: “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 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.” What are your views of what one Newspager has branded the mother of all U-turns, and the burial of Trussonomics? Deadline is ASAP. Also, please complete this one question survey >> here <<.

 

20 responses from the Newspage community

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Keith BuddenVerified
Managing Director at Ensurety
I welcome Jeremy Hunt's moves although I think it totally destroys any credibility Liz Truss had left, and effectively means that she has no mandate for her position. If she had a shred of decency, she would this afternoon go to see King Charles III and tender her resignation. Unfortunately, Truss and decency are not easy bed fellows, so I suspect she will cling on for dear life. What that then gives us is a PM who is simply a ventriloquist dummy, while Jeremy Hunt has his hand up her back and dictates what comes out of her mouth. Ironically, Jeremy Hunt has achieved his ambition via the back door. This administration must now be in its final days. Truss has made us a laughing stock around the world. I'm a Conservative and I don't want a General Election now as we will be heavily damaged by a resurgent Labour Party, but if we are to retain any credibility and show we have any moral compass, we must now call a General Election.
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
Liz Truss is in office, but not in power. Hunt is our de facto prime minister and Rishi Sunak is writing the budget. Truss is without authority, but she could claw it back if her supply side economic reforms still pass. I understand the reversals on tax Hunt has had to make, but reversing the proposed changes to IR35 is laying down his plan to change all of the supply side reforms, too, and this genuinely will be bad for growth. It will be very interesting to see what Hunt offers in the budget in a couple of weeks time for those who demand a high growth economy. He can’t simply increase taxes to these levels and not offer any reforms or forecasts for tax reductions in the future without getting crucified further in the polls.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
Taxi for Liz, please. Hunt has put the final nail in the coffin for Trussonomics, the disastrous economic experiment that we have had to endure for the past few weeks. Over the weekend, Hunt repeatedly said that he would do what he can to ensure rates do not go higher than they need to. That was a colossal shift from Liz who kept on passing the buck to the Bank of England. When the person who has been on the job for four days looks more like a PM than the PM, you know you need to call a removal van to No 10. She had the opportunity on Friday to redeem herself and save her job but she ran out of the press conference like Usain Bolt. It's game over surely for the PM.
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Debbie PorterVerified
Managing Director at Destination Digital Marketing
You have to hand it to politicians, they are as patient as a cat watching a mousehole. Hunt lost out in his leadership bid to Johnson, and Sunak lost out to Truss. They are now leading from behind to manoeurve themselves into positions they feel were rightly theirs in the first place. And why not? The Conservatives have had more changes in leadership than Lady Gaga goes through costume changes in a gig. Everyone will get a turn if they wait long enough. It's almost as if the country they are serving is immaterial as they focus on taking the top job.
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Gaurav ShuklaVerified
Managing Director at Home Me Mortgages
It seems Jeremy Hunt's announcement has injected some stability and calmness into the markets. However, there is one last thing for this government to do to placate the markets, and that's to remove the Prime Minister pronto. She's in position but not in power.
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Helen Williams0
Company Director at Willow Bridal
What a complete mess for the economy and businesses. This creates even more uncertainty when people and business owners need stability to plan, develop and grow.
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Anil MistryVerified
Director and Mortgage Broker at RNR Mortgage Solutions
Hunt has returned to reality and realised that the tax cuts in the mini-Budget were simply not feasible. Hopefully, this will bring confidence and stability to the UK markets and the weak Pound. It will be interesting to see how long Liz Truss lasts, as this announcement has obliterated her credibility.
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Paul NealVerified
Mortgages & Equity Release Advisor at First Choice Financial Services
How will this massive U-turn reinject confidence and stability into markets? This Government has passed beyond farce. The Prime Minister needs to go and go now.
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Kevin Drew0
Managing Director at Ascentant Accountancy
On Monday morning, it was reported that 50,000 SMEs in London had collapsed according to ONS figures, while the Insolvency Service reported insolvencies at an eight year high. With supply chain issues, the cost of living crisis and rising energy bills, now is the time that businesses really need to be looking ahead and planning a survival strategy, ensuring they have working capital and forecasting to ensure their future. With the constant change in tax announcements, we can't advise our clients with certainty on tax planning or best practice to ensure that they survive the next 12 months. We fear that this is the beginning, not the peak, of more business insolvencies and lost jobs.
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Mark Robinson0
Managing Director at Albion Forest Mortgages
With the Bank of England and the Government seemingly back on the same page, there may be light at the end of the tunnel for our economy. Whilst Liz may have thrown Kwasi under the bus over this, I think we still need a change in leadership at the top. It will be an interesting few days and weeks to see what mortgage lenders do with this renewed confidence the Bank of England has in the chancellor.
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David McCreadie0
Managing Director at Swi-tch
The U-turn is an admission of guilt to being utterly clueless. As a business that’s launched at the start of the year, I find this U-turn frankly disconcerting, particularly the reversal of the reversal of IR35 reforms, which has a direct impact on our business.
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Jonathan Southgate0
Founder at Sterling Southgate
Just weeks ago we were plunged in to a financial quagmire only for the new number two to come in, knock on the head all but a few of the Prime Minister's policies, completely undermining Number 10's authority. This has to be the final nail in the coffin of "Trussonomics" and proof that the current government are so detached from the general public, who have suffered unnecessary anxiety, uncertainty and fear as the purchasing power of their money diminishes and lenders are forced to increase interest rates at breakneck speed. This may go some way to settle the markets, but it leaves further uncertainty for the majority of people and businesses in the UK who have to deal with the fallout of this failed political experiment.
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Dr Jackie MulliganVerified
Founder at ShopAppy
This is the rollercoaster businesses and communities did not need to ride. The decisions were a serious blow -increasing our debt and reducing consumer confidence not to mention our reputation as a stable country. The debts we are left with will be for us all to pay over time as we will see by the undoing/ reducing of some key support announcements. I feel angry like many people and businesses that after such a tough few years, we have now got chaos and adversity of our own making. A virus of bad-decision-making that will and is impacting family businesses and households across the UK.
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Marianna BoguslavskyVerified
Founder and Digital Strategist at Boguslavsky & Co
It's a brutal time for small businesses with all of this policy backpedalling, and almost impossible to plan for the future. It's a calamity.
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James Miles0
Director - Mortgage Adviser at The Mortgage Quarter
It's time to go Liz. You are leading this country into financial ruin and a crash. A General Election is now essential and calling one is her only way to save face. Right now, the Tories will be destroyed at the polls.
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Marcus WrightVerified
Managing Director at Bolton Business Finance
I'm not sure which is worse, further government turmoil from a leadership change or continued conversative party turmoil from Truss staying. Never in all my life have I witnessed such a political mess and lack of good leadership from any of the political parties. Downing Street is officially now a disaster movie. I'm waiting for Bruce Willis to appear at the podium.
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David RobinsonVerified
Co-Founder at Wildcat Law
And she marched them up to the top of the hill and she marched them down again... So there we have it, the growth agenda has been comprehensively ditched, and with it the whole basis of Liz Truss' candidacy to be the leader of the Conservatives and hence our Prime Minister. But unlike her economic policies it seems to be a bit harder to get rid of her - at least for now. The Conservatives officially have no long term economic plan, this is all about stabilising the ship that they blew the bottom out of. We will all suffer in the long run with cuts to services that everyone seems to agree cannot be found, and increased taxation which will have to follow to plug the black hole. Forget the magic money tree we will now have a bottomless wishing well down which will pour billions of tax revenue for no appreciable return.
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Alastair HoyneVerified
CEO, Finanze Capital at Finanze Capital
Backtracking on some of Truss’ controversial fiscal measures since she stepped into office is a significant move towards restoring the government’s credibility and the markets’ sustainability. Hunt knows that the market reacts very swiftly, so he decided to announce the scrapping in the morning before going into the details in the afternoon to reassure markets that the government stays true to its commitment to fix the economy. However, today’s market reaction was led by the fall in yields, which are inversely related to bond prices. But this will be only temporary as the government still has to prove that it can align with the Bank of England if it wants to prevent further panic in the markets. Gilt prices remain high and still have a long way to go before diving back to the level before Truss was formally appointed as PM in early September.
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Eddie YoungVerified
Director at Eddie Young Magic
There are more donuts in this administration than there are at Krispy Kreme. Just call a general election and let the people decide who runs this country. And my guess is the current lot will deliver the ultimate vanishing act.
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Jenny BlythVerified
Small business owner at Storm in a Teacup Gifts
Truss and Hunt’s government has more roundabouts than Milton Keynes. Stability? We are living on quick sand with no idea when or whether we will find stable ground again. Businesses won’t survive, the NHS won’t survive, many of the people Truss supposedly governs will struggle to survive. Chaos is an understatement.