Chancellorship of Jeremy Hunt
 | |
| Chancellorship of Jeremy Hunt 14 October 2022 – present | |
| Party | Conservative |
|---|---|
| Nominated by | Liz Truss |
| Appointed by | Charles III |
| Seat | 11 Downing Street |
|
| |
Jeremy Hunt has served as Chancellor of the Exchequer of the United Kingdom since his appointment on 14 October 2022. His tenure has so far been dominated by the cost of living crisis, and the global energy crisis. Hunt has served under two prime ministers during his tenure, Liz Truss until 25 October, and Rishi Sunak from 25 October.
Hunt was appointed chancellor by prime minister Liz Truss, amid a government crisis, after Kwasi Kwarteng was dismissed as chancellor on 14 October, after 38 days in post. Within days, Hunt announced the reversal of the majority of Kwarteng's tax cuts in a televised statement. The announcement was described as "the biggest U-turn in British economic history". Following the resignation of Liz Truss on 25 October, Hunt remained chancellor after Rishi Sunak became prime minister.
During his time as chancellor, Hunt has delivered two Autumn Statements, and two Budgets to the House of Commons.
Appointment[edit]
Background[edit]
Liz Truss became Prime Minister on 6 September 2022, following the resignation of Boris Johnson. Hunt ran in the leadership election to replace Johnson as Conservative party leader and prime minister, but was eliminated in the first round of voting on 13 July, receiving 18 votes.[1] He endorsed Rishi Sunak after being eliminated.[2] Truss chose Kwasi Kwarteng as Chancellor of the Exchequer, with Hunt having no cabinet position, and remaining in the backbenches.
On 23 September 2022, Kwarteng delivered the 2022 mini-budget, which 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%; abolishing the highest (45%) 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; reversing the April 2022 increase in National Insurance; and cancelling the proposed Health and Social Care Levy.[3]
Following the mini-budget, the pound sterling fell sharply in response to the government's planned spending increases and tax cuts, losing 3% against the US dollar and dropping below $1.09.[4] It also fell 0.75% against the euro.[5] On 26 September, sterling reached an all-time low against the dollar, dropping to $1.0327, its lowest since Decimal Day in 1971.[6] On 13 October, Sky News reported that discussions were underway in Downing Street about reversing some of the measures announced in the mini-budget.[7]
Appointment as Chancellor[edit]
On 14 October 2022, Truss dismissed Kwarteng as chancellor after 38 days in office,[8] having summoned him back to the UK from a meeting of finance ministers in Washington in order to fire him. Later that evening, she appointed Hunt as the new chancellor.[9][10] Chris Philp was also replaced by Edward Argar as Chief Secretary to the Treasury.[11]
Sean O'Grady of The Independent, suggested Hunt's appointment had effectively made him a de facto prime minister,[12] a view echoed by the newspaper's chief political editor, John Rentoul.[13] But Hunt insisted that Truss was still in charge of her government.[14]
On 17 October, Hunt announced the reversal of the majority of Kwarteng's tax cuts in a televised statement, arguing that "at a time when markets are rightly demanding commitment to sustainable public finances, it is not right to borrow to fund this tax cut". The measures announced by Hunt would lead to an annual saving of £32bn.[15] The only tax cuts from the mini-budget to remain were the cuts to national insurance contributions and the raising of the stamp duty threshold. Plans to scrap the Health and Social Levy would also go ahead because the legislation relating to that was already going through Parliament.[16] Responding to the announcement, Shadow Chancellor Rachel Reeves said "An arsonist is still an arsonist, even if he runs back into a burning building with a bucket of water".[17] Faisal Islam described the announcement as "the biggest U-turn in British economic history".[18]
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Truss announced her resignation as Conservative party leader and prime minister on 20 October, triggering a leadership election.[19] Following Rishi Sunak's appointment as prime minister, it was confirmed that Hunt would continue as Chancellor.[20]
Tenure[edit]
Appointment of economic advisors[edit]
On the day of his appointment as chancellor, Hunt appointed four economic advisors to a panel to advise him: Karen Ward (a former top advisor to Philip Hammond), Rupert Harrison, Gertjan Vlieghe, and Sushil Wadhwani.[21]
Cost of living crisis[edit]
The cost of living crisis has dominated Hunt's time as chancellor, with him announcing many policies to help slow down the crisis, including a rise in the National Minimum Wage, and cuts in excise duty on fuel and alcohol.[22]
Budgets[edit]
As of 2024, Hunt has delivered two budgets during his chancellorship, in March 2023, and in March 2024. He also delivered two autumn statements, the November 2022 statement, and the November 2023 statement.
November 2022 autumn statement[edit]
Hunt's first Autumn Statement took place on 17 November 2022, after being delayed from 31 October, due to the handover of power from Liz Truss and Rishi Sunak. Hunt committed to maintaining scheduled public spending plans until 2025, but said that spending would slow after then. He also lowered the threshold at which earners become eligible to pay the top rate of income tax, and announced an increase in the National Minimum Wage, as well as increases for pensions and benefits in line with inflation. The Energy Price Guarantee was extended to April 2023, but raised from £2,500 to £3,000.[23]
March 2023 budget[edit]
Hunt's first budget was delivered on 15 March 2023. Hunt set out plans to remove barriers to employment (with measures such as an increase in the amount of free childcare), encourage business investment (with measures including a programme of tax cuts for business worth £27bn), and address labour shortages in some industries (such as the construction sector). Government help for families facing financial pressure was also extended, with the Energy Price Guarantee extended for a further three months. The cap on the lifetime allowance for tax-free pensions contributions was also abolished in an attempt to encourage workers such as NHS doctors and consultants to remain in employment longer.[24]
November 2023 autumn statement[edit]
Hunt's second Autumn Statement took place on 22 November 2022. Measures announced in the statement included reducing the amount of National Insurance contributions from 12% to 10%, making permanent a tax-break scheme for businesses purchasing equipment, a rise in the minimum wage, known as the National Living Wage, changes to benefits criteria, and investment in manufacturing and artificial intelligence.[25]
March 2024 budget[edit]
Hunt's second budget was delivered on 6 March 2024. Hunt abolished the non-dom tax status, reduced employee's national insurance by 2%, froze alcohol and fuel duties, increased tobacco and vapes duties, extended the oil and gas windfall tax, increased the child benefit threshold, announced further energy measures, announced further levelling-up funding, reduced capital gains tax by 4%, extended the Household Support Fund and increased the VAT threshold to £90,000 for small businesses, and kept income tax personal allowances at the same level (fiscal drag) [26][27]
See also[edit]
References[edit]
- ^ "Jeremy Hunt and Nadhim Zahawi knocked out of Tory leadership race". The Guardian. 13 July 2022. Archived from the original on 13 July 2022. Retrieved 13 July 2022.
- ^ Scott, Jennifer (14 July 2022). "Conservative leadership race: Jeremy Hunt backs Rishi Sunak after being knocked out of contest". Sky News. Archived from the original on 14 July 2022. Retrieved 14 July 2022.
- ^ Sillars, James. "Mini-budget: The key announcements from the chancellor at a glance". Sky News. Retrieved 23 September 2022.
- ^ Nanji, Noor (23 September 2022). "Pound sinks as investors question huge tax cuts". BBC. Retrieved 23 September 2022.
- ^ King, Ian (23 September 2022). "Mini-budget: Why financial markets have been spooked by the chancellor's growth plan". Sky News. Retrieved 24 September 2022.
- ^ Wearden, Graeme (26 September 2022). "Pound hits all-time low against dollar after mini-budget rocks markets". The Guardian. Retrieved 28 September 2022.
- ^ Meredith, Sam (14 October 2022). "UK markets await major press conference after PM Truss fires finance minister". CNBC. Retrieved 14 October 2022.
- ^ "Kwasi Kwarteng out as chancellor after mini-budget backlash". BBC News. 13 October 2022. Retrieved 14 October 2022.
- ^ Seddon, Sean; Davies, Brooke (14 October 2022). "Jeremy Hunt is new chancellor after Kwasi Kwarteng was sacked". Retrieved 14 October 2022.
- ^ "Truss confirms corporation tax U-turn after Hunt replaces Kwarteng as Chancellor". ITV News. 14 October 2022. Retrieved 14 October 2022.
- ^ "Treasury chief secretary Chris Philp moved aside and replaced by Edward Argar amid economic chaos". Sky News. Retrieved 14 October 2022.
- ^ O'Grady, Sean (14 October 2022). "Jeremy Hunt is now the de facto prime minister". The Independent. Retrieved 15 October 2022.
- ^ Rentoul, John (15 October 2022). "With Jeremy Hunt as the real prime minister, Rishi Sunak has won". The Independent. Retrieved 15 October 2022.
- ^ Crerar, Pippa (16 October 2022). "Jeremy Hunt says Liz Truss is still in charge, but fails to rule out more U-turns". the Guardian. Retrieved 16 October 2022.
- ^ Walker, Peter (17 October 2022). "Hunt rips up almost all of mini-budget and scales back energy help". the Guardian. Retrieved 17 October 2022.
- ^ "Chancellor brings forward further Medium-Term Fiscal Plan measures". GOV.UK. Retrieved 17 October 2022.
- ^ Yeatman, Dominic (18 October 2022). "PM silent as poll points to 22-seat election wipeout". Retrieved 18 October 2022.
- ^ Islam, Faisal (17 October 2022). "The biggest U-turn in British economic history". BBC News. Retrieved 17 October 2022.
- ^ Culbertson, Alix (20 October 2022). "Liz Truss resigns as prime minister". Sky News. Archived from the original on 20 October 2022. Retrieved 20 October 2022.
- ^ "Rishi Sunak cabinet: Jeremy Hunt confirmed as Chancellor". uk.news.yahoo.com. Archived from the original on 25 October 2022. Retrieved 25 October 2022.
- ^ "Who are the economic experts appointed to Jeremy Hunt's new advisory panel?". The Guardian. 17 October 2022. Archived from the original on 9 January 2023. Retrieved 24 January 2023.
- ^ "Budget summary: Key points from Jeremy Hunt's speech". BBC News. BBC. 7 March 2024. Retrieved 1 April 2024.
- ^ "Autumn Statement 2022: Key points at-a-glance". BBC News. 17 November 2022. Retrieved 17 November 2022.
- ^ "Chancellor unveils a Budget for growth". HM Government of the United Kingdom. 15 March 2023. Retrieved 18 March 2023.
- ^ Elliott, Larry; Crerar, Pippa (21 November 2023). "Autumn statement: Jeremy Hunt looks to cut UK taxes and 'turbo-charge growth'". The Guardian. Retrieved 25 November 2023.
- ^ "Budget 2024 live: Jeremy Hunt cuts National Insurance and extends child benefit in Budget". BBC News. 5 March 2024. Retrieved 2024-03-06.
- ^ "A Levelling Up Budget". GOV.UK. Retrieved 2024-03-07.