September 2022 United Kingdom mini-budget

rdf:langString September 2022 United Kingdom mini-budget

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rdf:langString United Kingdom

rdf:langString October 2021

rdf:langString United Kingdom mini-budget

rdf:langString September 2022

rdf:langString On 23 September 2022, the Chancellor of the Exchequer, Kwasi Kwarteng, delivered a Ministerial Statement entitled "The Growth Plan" to the House of Commons of the United Kingdom. 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%; the abolition of the 45% higher 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; the reversal of the April 2022 increase in National Insurance; and the abolition of the proposed Health and Social Care Levy. Following widespread negative response to the mini-budget, the planned abolition of the 45% tax rate was reversed 10 days later, while plans to scrap an increase in corporation tax were reversed 21 days later. The mini-budget 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. They also appeared to be concerned that no independent forecast by the Office for Budget Responsibility had been seen. By the next day of trading, the pound had hit an all-time low against the US dollar. 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. The IMF took the unusual step of issuing an openly critical response to the budget, saying it would "likely increase inequality". It urged the UK government to "re-evaluate" the proposed tax cuts. 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 Office for Budget Responsibility. Despite continued market turbulence, and calls from Members of Parliament (MPs) including members of the Conservative Party for a policy reversal, the prime minister Liz Truss and Kwarteng maintained that the proposals outlined in the mini-budget would go ahead. 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 and asked for his resignation. Truss then appointed Jeremy Hunt to replace him. 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. Further political turmoil followed, including the resignation of Suella Braverman as Home Secretary and allegations of MPs being "manhandled" during a parliamentary vote, and Truss's resignation on 20 October, just 45 days after taking office, making her the shortest UK prime minister by tenure. She was succeeded as Leader of the Conservative Party by Rishi Sunak on 24 October, and subsequently replaced by him as prime minister the following day. Hunt was retained as Chancellor, while 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. Initial reaction to the mini-budget was mixed. The Daily Mail called it "A true Tory budget", while Frances O'Grady, the General Secretary of the Trades Union Congress, branded it as "Robin Hood in reverse". Faisal Islam, the BBC's economics editor, described the mini-budget's reversal as "the biggest U-turn in British economic history". 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.

rdf:langString November 2022 United Kingdom autumn statement

rdf:langString October 2021 United Kingdom budget