What exactly was in Liz Truss’s October 2022 ‘mini‑budget’ and how would each measure have been funded?
Executive summary
The 23 September 2022 “mini‑budget” — formally presented as the Growth Plan — was a sweeping, ideologically driven package dominated by permanent tax cuts and selective temporary support that together were presented without independent costing and would have been financed mainly through additional borrowing predicated on promised growth gains; markets judged the package unfunded, prompting a rapid U‑turn and market interventions [1] [2] [3]. Almost all headline measures were reversed within weeks by successive chancellors after gilt and sterling turmoil and an IMF rebuke, leaving only a few changes (notably the National Insurance reversal and stamp duty reforms) intact in the near term [3] [4] [5].
1. The package: headline tax cuts announced
The mini‑budget announced roughly £45 billion a year of tax cuts including the scrapping of the planned rise in corporation tax from 19% to 25%, abolition of the 45% additional rate of income tax, a promised cut in the basic rate of income tax, cuts to dividend taxation, reversal of certain off‑payroll (IR35) reforms, and measures such as a proposed VAT‑free shopping scheme — a broad pro‑growth, pro‑supply‑side slate of measures aimed at stimulating investment [2] [4] [6] [7].
2. Temporary household support and other measures
Alongside permanent tax changes, the package included temporary support for households facing higher energy bills (framed as temporary relief rather than long‑term spending) and other one‑off measures; the overall communication focused on growth rather than detailed spending offsets or fiscal arithmetic made public at the time [8] [1].
3. Funding plan: “growth will pay for it” and no OBR score at announcement
Crucially, the plan lacked an Office for Budget Responsibility (OBR) forecast when unveiled and relied publicly on growth‑driven dynamic effects — the claim that faster growth would generate the revenue to pay for the cuts — rather than explicit near‑term offsets, which meant the package was effectively to be financed by additional government borrowing in the short/medium term [1] [7].
4. Market reaction: investors judged measures unfunded and pushed yields up
Markets reacted by treating the measures as unfunded, pushing up gilt yields and weakening sterling; the Bank of England later intervened with emergency gilt purchases (up to £65bn) to stabilise pension funds and the gilt market — a direct consequence of the reassessment that the tax cuts would increase government borrowing rather than be immediately self‑financing [5] [1] [9].
5. Fiscal arithmetic and cancellation: estimated £30–45bn cost and later reversals
Parliamentary analysis and later commentary found the package would have raised the deficit materially — Parliament’s research and analysts estimated roughly £45bn a year of unfunded cuts while some reporting put the broader economic and fiscal hit at around £30bn once knock‑on effects were included — and Jeremy Hunt then reversed most measures within weeks, explicitly citing the need to restore market credibility [2] [1] [10] [3].
6. Which measures survived and how they were funded afterwards
By mid‑October most of the mini‑budget’s tax cuts had been abandoned, with the government announcing the corporation tax rise would proceed and that “almost all” tax measures were reversed; the limited survivors cited in contemporary reporting were the reversal of the recent National Insurance increase and a reduction in stamp duty — measures financed within the conventional fiscal framework and followed by announcements of fiscal consolidation to offset the market‑facing damage [3] [4] [2].
7. Defenders, critics and the political aftermath
Supporters argued the approach would boost long‑term growth (notably economists cited by Truss such as Patrick Minford and Gerard Lyons), but many mainstream economists, the IMF and markets warned the package increased inequality and fiscal risk; the political fallout was immediate — sacking of the chancellor, rapid policy U‑turns and ultimately Truss’s resignation amid a credibility crisis [6] [7] [11].
8. Limits of reporting and unresolved granularities
Public reporting and parliamentary briefings make clear the mini‑budget was presented without an OBR costing and that the rump effect would be materially higher borrowing if enacted, but available sources do not provide a complete line‑by‑line, government‑published per‑measure financing schedule at announcement — assessments therefore rely on aggregate fiscal impact estimates and subsequent reversals rather than a pre‑announced funding ledger for each discrete measure [2] [1].