Oct 17, 2022 - World

New U.K. finance minister scraps most of tax cut plan

Chancellor of the Exchequer Jeremy Hunt leaves 10 Downing Street on Monday.

Chancellor of the Exchequer Jeremy Hunt leaves 10 Downing Street on Monday. Photo: Leon Neal/Getty Images

Jeremy Hunt, the U.K.'s new chancellor of the Exchequer, said Monday he was reversing "almost all" of a controversial economic plan as he attempts to calm markets and stabilize Prime Minister Liz Truss' government.

Why it matters: The plan — which would've cut around $48 billion worth of taxes if implemented in full — shook the British economy and, at one point, sent the pound to a record low against the dollar.

  • Truss fired Hunt's predecessor Kwasi Kwarteng on Friday after less than six weeks in office.
  • Her government had previously reversed two other key aspects of the plan — cuts to taxes paid by corporations and the country's highest earners.

Driving the news: Hunt revealed Friday that only a cut to national insurance — a social security tax — and a small stamp duty cut would remain from the original plan, saying "it is not right to borrow to fund this tax cut."

  • He also announced the government would scale back a cap on energy prices.

What he's saying: "A central responsibility for any government is to do what's necessary for economic stability," Hunt said. "This is vital for businesses making long-term investment decisions and for families concerned about their jobs, their mortgages and the cost of living."

  • "No government can control markets, but every government can give certainty about the sustainability of public finances," he added.
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