Britain’s new Chancellor of the Exchequer, Jeremy Hunt, is reversing almost all of his predecessor’s tax cuts, Kwasi Kwarteng. So he cancels plans to reduce income tax and dividend tax. The alcohol tax freeze was also lifted.

Hunt says the changes are being made to instill “confidence and stability.” He is also changing British Prime Minister Truss’ plans to deal with the energy crisis.

Three weeks ago, Truss and Kwarteng presented an extensive package of measures to boost economic growth. Among other things, Truss and Kwarteng wanted to borrow money to pay for the proposed tax cuts. Hunt doesn’t call this a good idea. He expects the British government to collect around 37 billion euros with the new measures.

turmoil in the financial markets

The already announced tax cuts led to unrest on the financial markets. The British central bank had to buy billions of dollars in bonds to calm the market.

Due to the resulting unrest, Truss and Kwarteng had already reversed the tax cut for the rich. When Kwarteng resigned on Friday, the British prime minister went on to announce that corporate taxes would rise to 25 percent. Previously, the plan was to keep the tax rates at 19 percent.

energy crisis

In addition to reversing several tax cuts, Hunt also makes changes to Truss’ plans to contain the energy crisis. Truss wanted electricity and gas prices to be frozen for a two-year period starting October 1. Hunt is now reversing this and only freezing prices until April 1, 2023. This should give people an additional incentive to use energy effectively.

The measures are intended to calm the financial markets. The first signs of this are already visible. The pound has risen again in response to the changed plans. Hunt has let it be known that Truss supports him and that more difficult decisions lie ahead.