Latest Stock Market News

Autumn Statement live: Jeremy Hunt pulls more people into top UK income tax band

UK chancellor Jeremy Hunt’s Autumn Statement will be the government’s first fiscal announcement under Rishi Sunak’s premiership.

Hunt, chancellor since October 14, has scrapped almost all the measures outlined by his predecessor Kwasi Kwarteng, who was sacked after 38 days in the job.

The past 12 months have seen several budgetary announcements under three prime ministers and four chancellors:

Autumn 2021

Prime minister: Boris Johnson; chancellor: Rishi Sunak

Sunak introduced his third Budget as a gateway towards a post-coronavirus economy. He pledged to pump more money into public services to help a post-pandemic recovery. His statement outlined plans to raise taxes to their highest in more than 70 years, including a rise in corporation tax.

March 2022

Prime minister: Boris Johnson; chancellor: Rishi Sunak

Rishi Sunak unveiled tax-cutting measures in his Spring Statement, his last as chancellor, which was delivered against a backdrop of rising inflation in the month that followed Russia’s invasion of Ukraine.

Sunak maintained a planned 1.25 percentage-point rise in national insurance contributions but increased the minimum threshold by £3,000. He aimed to cut the basic rate of income tax by 1 percentage point to 19 per cent in 2024 and proposed to cut fuel duty by 5p a litre.

September 23

Prime minister: Liz Truss; chancellor: Kwasi Kwarteng

Kwasi Kwarteng revealed the biggest tax cuts for 50 years in his fiscal statement, hailing his £45bn debt-financed “mini” Budget as the beginning of a “new era” of economic growth.

Kwarteng proposed ending the 45p additional income tax rate for the highest earners, reducing the basic rate from 20p in the pound to 19p, lowering stamp duty, national insurance and taxes on dividends, and instituting a levy on house purchases.

He planned to scrap a proposed corporate tax rise and keep it at 19 per cent while maintaining the 8 per cent charge on bank profits, which had been set to be reduced next year.

But markets went into a tailspin after the announcement, and sterling tumbled to a record low against the dollar. Borrowing costs surged and pension funds came under pressure. The Bank of England intervened.

The fiscal announcement led to his downfall — he was soon sacked as chancellor — and Liz Truss followed by quitting as prime minister. Her tenure had lasted 45 days.

September 28

Prime minister: Liz Truss; chancellor: Kwasi Kwarteng

The Bank of England launched a £65bn emergency government bond-buying programme to stem a debt crisis and protect pension funds threatened by insolvency after gilt yields soared.

The central bank warned of a “material risk to UK financial stability” from turmoil in the gilts market.

October 17

Prime minister: Liz Truss; chancellor: Jeremy Hunt

Three days into his chancellorship, Hunt ripped up two-thirds of Kwarteng’s mini-Budget measures and warned of “eye-wateringly difficult” decisions. Truss had already axed tax cuts for big business and the wealthy.

Hunt scrapped a £6bn cut in the basic rate of income tax, along with changes to dividend taxes, a VAT tax break for foreign shoppers and a freeze on alcohol duty.

The chancellor curtailed Truss’s scheme to cap British households’ annual energy bills at £2,500 on average for two years, saying it would end after six months.

Read More: Autumn Statement live: Jeremy Hunt pulls more people into top UK income tax band

You might also like