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Jeremy Hunt scales back energy bill support scheme and reverses nearly all mini-budget tax cuts – UK politics live | Politics

Hunt confirms energy price guarantee will only last in its current form until April

Hunt confirms that the energy price guarantee, as originally announced, will only last until April.

He says Liz Truss agreed that it would be wrong to make such a long-term spending commitment, when it is unclear what will happen to energy prices in the future.

He says there will then be a review. A more targeted system will then be put in place, he says.

This is the big surprise in today’s announcement. It will probably go down well with the markets. But this cuts the knees from under Liz Truss. The only policy that she had left that she was able to take credit for – see 11.04am – has now gone into the shredder. There is nothing left of the Truss agenda at all.

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Labour claims government U-turn on fuel bills freeze makes case for new windfall tax on energy companies even stronger

Labour says the energy price guarantee U-turn makes it even harder to understand why the government won’t back its plan for a new windfall tax on energy companies. These are from Rachel Reeves, the shadow chancellor.

All the Chancellor’s statement underlines is that the damage has been done.

This is a Tory crisis made in Downing Street, paid by working people with higher mortgage and higher borrowing costs.

They’ve lost all credibility. 1/3

— Rachel Reeves (@RachelReevesMP) October 17, 2022

The Chancellor said growth requires “confidence and stability”. It is clear the Tories can’t provide this.

There will continue to be a huge cost to families because of them.

We’re still flying blind with no OBR forecasts and no clarity on the impact of their mistakes. 2/3

— Rachel Reeves (@RachelReevesMP) October 17, 2022

The change on their energy plan begs the question yet again – why won’t they bring in a windfall tax on energy producers to help foot the bill?

Only Labour offers the leadership and ideas Britain needs to fix the economy and get out of this mess. 3/3

— Rachel Reeves (@RachelReevesMP) October 17, 2022

Hunt says ‘some areas’ of public spending will have to be cut

In his statement Jeremy Hunt also confirmed that public spending would be cut in “some areas”. He said:

There will be more difficult decisions, I’m afraid, on both tax and spending as we deliver our commitment to get debt falling as a share of the economy over the medium term.

All departments will need to redouble their efforts to find savings and some areas of spending will need to be cut.

But as I promised at the weekend, our priority in making the difficult decisions that lie ahead will always be the most vulnerable and I remain extremely confident about the UK’s long-term economic prospects as we deliver our mission to go for growth.

What Jeremy Hunt said about how energy price guarantee will become more targeted and less expensive from April

This is what Jeremy Hunt said in his statement about the energy price guarantee.

The biggest single expense in the growth plan was the energy price guarantee.

This is a landmark policy supporting millions of people through a difficult winter, and today I want to confirm that the support we are providing between now and April next year will not change.

But beyond that, the prime minister and I have agreed it would not be responsible to continue exposing public finances to unlimited volatility in international gas prices.

So I’m announcing today a Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.

Any support for businesses will be targeted to those most affected and the new approach will better incentivise energy efficiency.

Jeremy Hunt delivering his statement to broadcasters. Photograph: Sky News

Liz Truss held a political cabinet call at 10am to discuss the decision to scrap the mini-budget measures, PA Media reports. PA says:

The chancellor set out the “worsening global economic situation, with interest rates rising around the world as monetary policy returns to a sense of normality”, a No 10 source said.

“Because of this, the government is adjusting its programme while remaining committed to long-term reforms to improve growth such as investment zones and speeding up infrastructure projects.”

Jeremy Hunt is expected to meet all secretaries of state this week to decide on future spending plans, which will then be submitted to the Office for Budget Responsibility on Friday.

Hunt confirms energy price guarantee will only last in its current form until April

Hunt confirms that the energy price guarantee, as originally announced, will only last until April.

He says Liz Truss agreed that it would be wrong to make such a long-term spending commitment, when it is unclear what will happen to energy prices in the future.

He says there will then be a review. A more targeted system will then be put in place, he says.

This is the big surprise in today’s announcement. It will probably go down well with the markets. But this cuts the knees from under Liz Truss. The only policy that she had left that she was able to take credit for – see 11.04am – has now gone into the shredder. There is nothing left of the Truss agenda at all.

Hunt reverses ‘almost all’ of mini-budget tax cuts, raising an extra £32bn per year

Jeremy Hunt is speaking now.

He says a central responsiblity for any government is economic stability.

No government can control the markets. But every government can give certainty about the sustainability of the public finances.

He says, as well as going ahead with the corporation tax increase, he is announcing other changes.

He is doing so now ahead of a statement to MPs.

We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not [already started the parliamentary process].

He says this includes:

Hunt also says the 20% basic rate of tax will remain indefinitely.

He says these measures will raise an extra £32bn per year for the Treasury

UPDATE: Hunt 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.

Hunt also said the basic rate of income tax could remain at 20p in the pound until economic conditions allowed a reduction. He said:

It is a deeply held Conservative value – a value that I share – that people should keep more of the money that they earn.

But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut.

How Truss attacked Labour at PMQs last week for only proposing to freeze energy bills for six months

In the light of what journalists like Hary Cole and Steven Swinford are reporting about the energy price guarantee policy being revised, this is what Liz Truss said at PMQs five days ago.

We have taken decisive action to make sure that people are not facing energy bills of £6,000 for two years. We remember that the opposition are only talking about six months. We have also taken decisive action to make sure that we are not facing the highest taxes for 70 years in the face of a global economic slowdown …

The fact is that all the opposition have said is that people should be supported for six months. Does he think that, in March, pensioners should be facing very high energy bills? That is what will happen if he does not support our energy price guarantee.

From Steven Swinford at the Times

BREAKING:

Jeremy Hunt is poised to announce that the energy price guarantee will only remain universal *until April*

It will then become targeted and capped

Govt helped by falling gas prices@MrHarryCole first highlighted changes this morning

— Steven Swinford (@Steven_Swinford) October 17, 2022

Jeremy Hunt’s statement on further changes to mini-budget

Jeremy Hunt, the new chancellor, is about to announce changes to the mini-budget.

He is speaking to the media, and not waiting to address parliament at 3.30pm, because he wants the markets to hear what is happening asap.

Tory leadership crisis – some latest developments

  • Penny Mordaunt, the leader of the Commons, has written an article for the Daily Telegraph saying Tory MPs should “work with the prime minister and her new chancellor”. In its splash the Daily Telegraph writes this up as Mordaunt being supportive of Truss. But in her article Mordaunt barely mentions Truss and instead she stresses the importance of “pragmatism” (she uses the word three times) and much of the article reads like an indictment of Truss’s approach to politics, not an endorsement of it. For example, Mordaunt says:

This land of ours is full of stories of those in our communities – national or local, large and small – that have risen to challenges. That have stayed the course or made improvements. Our characteristic hopeful pragmatism has provided stability. It has ensured extremism has never taken hold …

We must remember what we have achieved and how we did it. Above all, it was down to a commonsense approach. Pragmatism must always take precedence over policy. The Conservative party understand this. If it has a fault, it’s that it’s impatient to get on with it.

There is a talented team of energetic and dedicated public servants at every level of government in this country. They are matched by leaders in just about every field of human endeavour. They know the problems we face are difficult and complex.

The national mission though is clear, as the prime minister said. That is what we should all focus on now. It needs pragmatism and teamwork. It needs us to work with the prime minister and her new chancellor. It needs all of us.

Mordaunt, of course, is another of the Tories seen as a potential replacement for Truss. The Telegraph may have published her manifesto.

  • Steve Baker, the Northern Ireland minister, has told ITV’s Anushka Asthana that Tory MPs hoping to remove Truss are not being realistic.

  • George Osborne, the former Tory chancellor, has described Truss as PINO – prime minister in name only. He told the Andrew Neil Show last night that he thought Truss would probably be gone by Christmas. (To be fair, he said much the same about Theresa May just after the 2017 election, but was out by about two years.)

  • MPs believe that as many as 100 Conservative backbenchers may have written no-confidence letters demanding a vote on whether to depose Liz Truss, Hugo Gye and Chloe Chaplain report for the i.

  • Ben Wallace, the defence secretary, has indicated that he will withdraw support for Truss if she reneges on her promise to raise defence spending to 3% of GDP, Jason Groves reports for the Mail.

  • Grant Shapps, the former transport secretary, has written an article for the Times saying Tory defeat at the next election is not inevitable. He says:

I am a contrarian. If someone tells me that such and such is so, I say “prove it”. So, the doomsters say the Tories are finished. The consensus is that Labour’s 20 to 30-point lead is unassailable. I say, look at Theresa May’s poll lead before the 2017 election. She was 23 points ahead with two months to go and managed to blow that lead entirely, resulting in a minority Tory government. We have two years to go and we can do a hell of a lot of good in two years.

But we have to bin the infighting and ideology and rediscover core Conservatism: a desire to preserve that which is good, an aversion to unnecessary state interference in people’s daily lives, a belief in the liberating power of free enterprise. We must demonstrate compassion for the vulnerable, and maintain an unwavering belief in the greatness of this nation and its value to the wider world as a force for good.

Nothing in politics is written in stone. Precedents are there to be broken. Can the Conservatives win a fifth term? Of course we can. So long as we remember why we were elected.

Andrew Bowie, a Scottish Conservative MP who backed Rishi Sunak in the leadership contest, urged Liz Truss to appoint Sunak to her cabinet. Bowie told Times Radio this morning:

I think that if we are going to bring the party back together, govern in the national interest and go on to do good things as a government [we must] demonstrate the ability to reach out across the divide within the party. That means having the best brains and the best talents within Government – that includes, obviously, Rishi Sunak.

But there is no evidence that Sunak wants a job in Truss’s cabinet. The former chancellor is one of several candidates being discussed as a possible successor to Truss as prime minister, and Sunak (who has not given up his ambitions to lead the country) seems to have concluded that he is best advised keeping his head down.

This is from Nick Macpherson, a former permanent secretary at the Treasury.

Mr Hunt right to bring forward statement. Opportunity to calm markets and reduce debt interest pressures. Important to retain perspective. UK is solvent. Economy will recover. Inflation will fall. HMT and BoE working well together. Much more a political than an economic crisis.

— Nick Macpherson (@nickmacpherson2) October 17, 2022

Labour is ahead of the Conservative party on 14 out of 15 policy areas, when voters are asked who would tackle them best, according to Ipsos polling for the Evening Standard.

As Nicholas Cecil reports in his story, Labour is even ahead on managing the economy for the first time since 2007. He says:

Labour is seen to have the best policies on managing the economy over the Conservatives for the first time since September 2007. Sir Keir Starmer’s party is on 34 per cent, up eight points since April, with the Tories on 21 per cent, down 11 points and a gap now of 13 points.

EXC: Tories lag behind Labour on 14 out of 15 key policies: Managing economy, tax, pensions, benefits, crime, EU, cost-of-living, NHS, environment, unemployment, education, poverty & inequality, immigration, housing..but not defence, @IpsosUK poll https://t.co/xy7kFBsPUH pic.twitter.com/B8h7yonN11

— Nicholas Cecil (@nicholascecil) October 17, 2022

Other polls have put Labour ahead on the economy this year, but polling companies tend to ask this question in different ways, and Ipsos asks people to rate parties on “managing the economy” separately from other aspects of economic policy, like taxation and cost of living.

Commenting on the polling, which was carried out before Kwasi Kwarteng was sacked on Friday, Gideon Skinner, head of political research at Ipsos, said:

Over the last couple of years, the Conservative party image has been in steady decline – particularly on issues of governing competence and empathy – and this has continued under the new prime minister.

Now however it is compounded by the party also falling behind Labour when the public rates who has the best policies on their top two priorities: the cost of living crisis and the economy (where Labour have their first lead for 15 years).

Victoria Atkins, the Tory former prisons minister and, like Damian Green (see 9.25am), was a bit more explicit than he was about Liz Truss being on probation when asked about the prospects of her remaining PM.

Asked on the Today programme if she wanted Truss to lead the party into the next election, Atkins said:

She is the prime minister at the moment, we will not have an election for the next few years. I want her to get us back on to the right track, I want her to reiterate our concerns for our constituents and for compassionate one nation values.

Asked again if she wanted Truss to lead the Conservatives into the next election, Atkins replied:

If she’s able to bring those values to the fore then I’m very happy for her to do that.

Victoria Atkins
Victoria Atkins Photograph: Kirsty O’Connor/PA



Jeremy Hunt scales back energy bill support scheme and reverses nearly all mini-budget tax cuts – UK politics live | Politics Source link Jeremy Hunt scales back energy bill support scheme and reverses nearly all mini-budget tax cuts – UK politics live | Politics

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