LONDON (HPD) — British Treasury chief Jeremy Hunt on Monday withdrew most of an economic package announced by the government a few weeks earlier, which included a plan to cut income taxes.
In an attempt to calm jittery financial markets, Hunt said he would cancel “almost all” of the tax cuts announced last month and announced plans were underway to reduce government spending.
The planned one percentage point reduction in the base income tax rate, which was to take effect next year, will not apply, Hunt said. He also lowered a cap on energy prices designed to help households pay their bills. It will now be reviewed in April, instead of lasting two years.
Hunt was appointed on Friday after Prime Minister Liz Truss sacked Kwasi Kwarteng, who spent less than six months in the job. Truss and Kwarteng had jointly announced a 45 billion pound ($50 billion) unfunded tax cut plan on September 23 that spooked financial markets, plunged the pound to record lows and forced the Bank of England to take emergency measures.
Hunt’s announcement, hastily arranged on Monday, came just two weeks before he was due to deliver a medium-term fiscal plan.