Mini-budget latest LIVE: Kwasi Kwarteng set to announce tax cuts for millions


wasi Kwarteng has unveiled a mini-budget that delivers billions of pound worth of tax cuts – including a surprise move to scrap the 45% top rate of income tax paid by the UK’s wealthiest.

The Chancellor announced sweeping moves intended to rev up the economy in the eagerly-awaited “fiscal event” on Friday morning.

The Government is dubbing it a “growth plan” at a time when the UK faces a cost-of-living crisis, recession, soaring inflation and climbing interest rates.

The Chancellor told MPs the planned rise to corporation tax would be canceled as he announced the cap on banker bonuses would be scrapped.

He also announced that the basic rate of income tax would be cut to 19p in the pound from April 2023. And he said the 45% higher rate of income tax will be “abolished”.

Mr Kwarteng said his economic vision would “turn the vicious cycle of stagnation into a virtuous cycle of growth”.

But shadow chancellor Rachel Reeves said the strategy amounts to an “admission of 12 years of economic failure” under successive Conservative governments.

The Labor MP described the Prime Minister and Mr Kwarteng as “two desperate gamblers in a casino chasing a losing run”.

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IFS: Chancellor is ‘betting the house’ on risky high borrowing strategy

The Institute for Fiscal Studies (IFS) think tank has analyzed the Chancellor’s statement and said he is “betting the house” on a risky strategy.

Director Paul Johnson said: “Injecting demand into this high-inflation economy leaves the government pulling in the exact opposite direction to the Bank of England, who are likely to raise rates in response.

“Early signs are that the markets – who will have to lend the money required to plug the gap in the government’s fiscal plans – aren’t impressed. This is worrying”.

He said Cabinet members could be forgiven for having whiplash, such is the sudden change of the Government’s change of economic policy.

“Mr Kwarteng is not just gambling on a new strategy, he is betting the house,” he said.


West End welcomes return of VAT-free shopping for tourists

West End business leaders have hailed the return of VAT free shopping for foreign visitors as “a great victory” for London.

Chancellor Kwasi Kwarteng said he would reverse the axeing of the perk which had made shopping in the capital 20 per cent cheaper for overseas tourists.

Dee Corsi, interim CEO at business group New West End Company, said: “Today’s decision to reintroduce tax-free shopping for overseas visitors is a great victory for London’s International Centres.

“Now the West End can compete on a level playing field with Paris, Milan and Madrid as one of the world’s top shopping and leisure destinations.”

Linda Ellett, UK head of consumer markets, retail and leisure at consultants KPMG, added: “The return of VAT-free shopping for tourists increases the London’s competitiveness when it comes to attracting the spending power of international visitors.”

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Truss: Our vision sets out how we’re going to rebuild our economy

Liz Truss said that the Government’s economic vision would set out “how we are going to rebuild our economy and deliver for the British people”.

She tweeted: “Growth is key to delivering more jobs, higher pay and more money to fund public services, like schools and the NHS.

“Our Growth Plan sets out how we are going to rebuild our economy and deliver for the British people.”


Renewable energy industry cautiously welcomes plans to make it easier to build wind turbines

The renewable industry has tentatively welcomed the Government’s plan to make it easier for developers to build wind turbines in England for the first time in seven years.

The Government said that it would bring rules for onshore wind farms in line with other developments.

Rules that were put in place in 2015 have effectively stopped the construction of any onshore wind farms in the UK since then.

Jess Ralston, senior analyst at the Energy and Climate Intelligence Unit, said: “Around eight in 10 people support onshore wind, so the ban has been a major anomaly in British energy policy given it’s both cheap and popular with the public.

“So a decision to lift the ban suggests the new Government has listened to the experts and understands building more British renewables reduces our reliance on costly gas and so brings down bills.”

But energy insiders also warned that more detail will be needed, and rules will have to be changed, before they know how significant the move will be.


Conservative donor and entrepreneur welcomes tax cuts

Sir Rocco Forte, a Conservative donor and chairman of Rocco Forte Hotels, welcomed Chancellor Kwasi Kwarteng’s raft of tax cuts.

He told BBC Radio 4’s World At One programme: “I think it’s terrific. I’ve never seen a government hit the ground running as fast as this one in coming to power.

“This is going to be a huge boost to the economy and it’s only the beginning I think of what the Government intends to do.

”I’m very, very encouraged by this. It’s a budget which will help enterprise, it will allow individuals to reap the rewards of their efforts and hard work.”


Tax rises or spending cuts will be needed in future, warns think tank

The Institute for Fiscal Studies has warned future tax rises or spending cuts will be needed to pay for increasing debt.

Deputy director Carl Emmerson estimated that even once the energy support package expires in two years, the Government will be borrowing £110 billion a year, meaning debt continuing to rise.

He told the BBC Radio 4’s The World at One: “It could be that the Government gets lucky and the growth comes along … but at the moment where we’re standing it looks like these tax cuts won’t be sustainable and that other tax rises or spending cuts will be needed to pay for them.

“These tax cuts alone will not deliver sufficient increases in growth to make them self financing.”

The Government argues that the growth the tax cuts will foster will lead to greater tax revenues in the long run.


Mini-budget will ’embed fairness across UK’, says Welsh finance minister

Wales’ finance minister says she believes the Chancellor’s mini-budget will “embed unfairness” across the country.

Rebecca Evans MS said: “Today’s announcements show the UK Government is heading in a deeply worrying direction, with misplaced priorities leading to a regressive statement that will embed unfairness across the United Kingdom.

“Instead of delivering meaningful, targeted support to those who need help the most, the Chancellor is prioritizing funding for tax cuts for the rich, unlimited bonuses for bankers and protecting the profits of big energy companies.”


Changes will benefit those on highest incomes, says Mayor of London

Mayor of London Sadiq Khan has criticized the Government’s mini-budget, suggesting the new economic plan will benefit the wrong sectors.


Nursing union says Government has ‘wrong priorities’, urges strike action

The Royal College of Nursing has described the mini-budget as giving “billions to bankers and nothing to nurses”.

General secretary and chief executive Pat Cullen said it is a clear sign the Government has “the wrong priorities”.

“Nursing will be dismayed by the decision to prioritize well-off bankers over NHS and social care staff, some of whom are using food banks and live on a financial knife-edge,” she said.

“Ministers have taken advantage of the good will of nursing staff for far too long and we’re urging our members to vote in favor of strike action when our ballot opens on October 6.”


Government borrowing to increase by £72bn

Government borrowing will increase by £72 billion as a result of Chancellor Kwasi Kwarteng’s mini-budget, according to Treasury documents.

The Debt Management Office’s net financing requirement has been revised upwards from £161.7 billion in April to £234.1 billion.

It will be funded through additional gilt sales of £62.4 billion and net Treasury bill sales of £10 billion.


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