UK unveils Medium-Term Fiscal Plan steps, opens EMFS for applications

The measures are aimed at supporting fiscal sustainability, ensuring the country’s economic stability and offering confidence in the government’s commitment to fiscal discipline.

The changes are estimated to be worth around £32 billion a year, Hunt said in a statement.

The basic income tax rate will remain at 20 per cent until economic conditions allow for it to be cut. The 1.25 percentage points increase in dividends tax took effect in April this year.

The announcement represents another down payment following the reversal of the corporation tax cut announced on October 14 by Prime Minister Liz Truss.

In his statement, Hunt announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in parliament.

A treasury-led review of energy support after April 2023 was launched as well. The objective of the review is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.

The Energy Price Guarantee and the Energy Bill Relief Scheme are supporting millions of households and businesses with rising energy costs, and the chancellor made clear they will continue to do so from now until April next year.

Hunt said any support for businesses will be targeted to those most affected, and that the new approach will better incentivise energy efficiency.

The treasury and the Bank of England also opened the Energy Market Financing Scheme (EMFS) for applications yesterday. Applications will be accepted for a period of three months.

The EMFS was announced by the prime minister on September 8, and in The Growth Plan, the then chancellor had confirmed that it will provide cent per cent guarantee to commercial banks to provide additional lending to energy firms.

This scheme addresses the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and electricity markets as a result of margin calls.

It is aimed at providing a backstop to support energy firms facing large and unexpected margin calls. It will offer resilience to energy markets and therefore help to reduce the eventual cost for businesses and consumers, a government press release said.

Financial institutions, state-owned enterprises or commodity trading houses are not eligible for this scheme.

Fibre2Fashion News Desk (DS)