Jeremy Hunt’s mini-budget emergency statement: Business community reacts

Newly appointed chancellor of the exchequer Jeremy Hunt has announced that the government will reverse “almost all” of the tax cuts it announced in last month’s mini-budget, and is scaling back support on energy bills.

Additionally, the chancellor noted that a 1p cut to income tax will be delayed “indefinitely until the UK’s finances improve”, rather than being introduced in April 2023 as was announced in Kwasi Kwarteng’s mini-budget three weeks ago.

Some of the other key measures to be axed, according to the chancellor, included:

• Cuts to dividend tax rates
• The reversal of off-payroll working reforms introduced in 2018 and 2021
• VAT-free shopping for non-UK visitors
• The freeze on alcohol duty rates.
• Easing of IR35 rules for the self-employed introduced in 2017 and 2021
• Basic rate of income tax to remain at 20 per cent, not reduce to 19 per cent from April 2023
• Energy price guarantee is now only until April 2023.

But just how has the business community reacted to this latest development? Read on to find out more…

Joshua Raymond, director at online investment platform XTB.com:

“We’ve seen the markets react positively to the Chancellors’ statement. The pound has gained against every major currency today including 0.5 per cent against the US dollar and euro.

“Long dated gilt yields have fallen sharply with the 30yr bond yield dropping by more than 0.4 per cent. The statement provides some much needed clarity ahead of the OBR forecasts due out in two weeks time. Perhaps the largest news is the earlier cut off to the energy price cap to April next year. This is a significant development both financially and politically.

“Financially, the energy price cap is one of the largest contributions to the black hole in the fiscal budget and gives the government more headroom for tighter fiscal cuts especially should a global recession force energy prices lower than expected in the medium term.

“Politically however it’s devastating for the Liz Truss premiership. It’s a complete reversal on every single major political pledge she has made to date and as a result, her political authority is most likely at an end. In a matter of days, I expect the market focus to shift more towards who replaces Liz Truss as Prime Minister of the UK.

“Liz Truss today became Prime Minister in name only.”

Mohsin Rashid, co-founder of London based fintech ZIPZERO:

“Liz Truss has hired the only person capable of delivering public spending cuts without worsening their popularity. Hunt, a relic of austerity, has forgotten nothing from his alma mater, today announcing that government implosion and market instability will be paid for with public service cuts.

“Meanwhile, businesses simply don’t know which way to look. Growth, growth, growth we were told. There is simply no way to plan, invest or, indeed, grow in an age of twenty-four-hour policies.

“During the long three months of the leadership election, both businesses and the public were told to patiently await stability and security; we are still waiting.”

Michael Kill, CEO of the Night Time Industries Association:

“In less than 40 days in office the Prime Minister has crashed the economy, placing an insurmountable level of pressure on businesses and people’s livelihoods. The Statement from the new Chancellor, may calm the markets, but has critically compromised thousands of businesses and workers across our sector.”

“This will create further uncertainty around energy costs after April 2023, and will see alcohol duty add to an already untenable operating costs. Our industry is now facing one of the toughest winters in history.”

Emma Jones, CBE, founder small business support platform Enterprise Nation:

“While today’s statement was all about calming the markets, what was absent was a signal that the Government is backing small businesses and their growth plans, offering them the stability and encouragement they need to keep going.

“After the previous chancellor announced his mini budget, we issued a statement to say that support for enterprise in politics was back. In addition to tax cuts there were repeated references to how the government wanted to support enterprise in helping people become their own boss and to keep growing.

“Almost all of the fiscal measures have been reversed today but we hope the appetite to support and celebrate enterprise has not.”

By Matthew Neville – Correspondent, Bdaily

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