Labour leads by 36 points, the new poll by Redfield and Wilton revealed today, as Liz Truss’s premiership continues to suffer. The Labour have the largest lead of any party since October 1997.

Chancellor of the Exchequer Jeremy Hunt made an emergency, televised statement today to reassure the markets by making a reversal of Truss’s economic plan. 

“No government can control markets – but every government can give certainty about the sustainability of public finances. And that is one of the many factors that influence how markets behave,” said Hunt.

“At a time when markets are rightly demanding commitment to sustainable public finances, it is not right to borrow to fund this tax cut. So I have decided that the basic rate of income tax will remain at 20% and it will do so indefinitely,” said Hunt.

Chancellor of the Exchequer said the government will no longer be proceeding with the following:

  • The cut 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 said today’s announcements will save £32 billion per year. He also announced that the government will form an expert panel of economists as part of a new Economic Advisory Council.

So far, the markets have reacted positively. 

The Labour Leader: The lady is not for turning up

In the House of Commons, Truss was a no-show. Penny Mordaunt announced the prime minister was absent “on urgent business,” prompting the Labour Leader Sir Kier Starmer to show no mercy to Truss. 

“I guess under this Tory government, everybody gets to be prime minister for 15 minutes,” said the Labour leader Starmer accusing Truss’s government of losing credibility.

“The country is in an economic crisis made in Downing Street because they’ve lost all credibility, ” said Starmer.

The Labour leader accused the government of inflicting long-term damage on the economy.

“The lady is not for turning up,” Starmer accused Truss of “hiding away.” The Labour leader believes that Truss has no mandate from her party and no mandate from the country.

 Prime Minister Liz Truss in 10 Downing Street. Picture by Simon Dawson / No 10 Downing Street

Without clarifying why she was absent from the House of Commons, Truss entered the Chamber in the House of Commons just before half past four. 

Many of Conservative MPs have privately been saying that Truss’s position is untenable. A few of them are starting to say publicly now, too. They are calling on the prime minister to quit but they haven’t decided who they prefer as their next leader and next UK Prime Minister.

Liz Truss remains on probation. The Labour leader, if the General Election takes place may end up as the new prime minister.

Jeremy Hunt’s speech in full

The Chancellor Jeremy Hunt working with Treasury officials on the Medium-Term Fiscal Plan in his offices in HM Treasury

A central responsibility for any Government is to do what is necessary for economic stability.

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 and that is one of the many factors influencing how markets behave.

And for that reason, although the Prime Minister and I are both committed to cutting corporation tax on Friday she listened to concerns about the mini budget and confirmed we will not proceed with the cut to Corporation Tax announced.

The government has today decided to make further changes to the mini budget.

And to reduce unhelpful speculation about what they are, we have decided to announce these ahead of the Medium-Term Fiscal Plan, which happens in two weeks.

I will give a detailed statement to Parliament and answer questions from Members of Parliament.

But because these decisions are market sensitive, I have agreed with the Speaker the need to give an early, brief summary of the changes which are all designed to provide confidence and stability.

Firstly, 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 cut 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.

Secondly, the government’s current plan is to cut the basic rate of income tax to 19% from April 2023.

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

So I have decided that the basic rate of income tax will remain at 20% and it will do so indefinitely, until economic circumstances allow for it to be cut.

Taken together with the decision not to cut Corporation Tax, and restoring the top rate of income tax the measures I’ve announced today will raise, every year, around £32bn.

Finally, 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 am 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.

The most important objective for our country right now is stability.

Governments cannot eliminate volatility in markets, but they can play their part, and we will do so because instability affects the prices of things in shops, the cost of mortgages, and the value of pensions.

There will be more difficult decisions to take 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.

But growth requires confidence and stability, and the United Kingdom will always pay its way.

This Government will therefore make whatever tough decisions are necessary to do so.

Thank you.

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