Mini-Budget 2022 – Latest: Kwasi Kwarteng Unveils Plan To Cut Taxes And Cut Energy Bills

Liz Truss Refutes Claim Tax Cuts ‘Unfairly’ Benefit the Wealthy

The chancellor plans to announce tens of billions of pounds in additional spending and tax cuts today in a mini-budget, officially known as a “tax event.”

Kwasi Kwarteng will pledge to “turn the vicious circle of stagnation into a virtuous cycle of growth” while explaining the new government approach to the economy.

His statement is expected to set out how the government will fund the energy price cap for households and businesses, as well as details of many of Liz Truss’ tax cuts.

The government calls it a “growth plan” as the UK faces a crisis in the cost of living, recession, soaring inflation and rising interest rates.

Mr Kwarteng announced yesterday that he was canceling Rishi Sunak’s 1.25 percentage point increase in National Insurance from Nov. 6 – but Treasury figures showed the change would benefit higher incomes far more than the poorest.

The chancellor also plans to scrap a planned corporate tax hike and remove the cap on banker bonuses.

It has been reported that he will cut stamp duties and proposals to accelerate a planned 1 pence cut on income tax and lower VAT are also reportedly being considered.

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Kwarteng seeks end to ‘cycle of stagnation’

Chancellor Kwasi Kwarteng will detail nearly £200bn in tax cuts, energy subsidies and planning reforms, as part of Prime Minister Liz Truss’ drive to end the “cute”.

Financial markets will also receive an initial price tag on the proposals as the UK’s Debt Management Office will publish new loan plans after Kwarteng finishes his speech.

The market backdrop could hardly be more hostile to the new finance minister. The British pound fell yesterday to its lowest level against the dollar since 1985, while UK government bonds recorded their biggest one-day drop since the start of the pandemic.

Chancellor Kwasi Kwarteng arrives in Downing Street for the first cabinet meeting after Liz Truss took office as the new Prime Minister in London, England, on September 7, 2022

(Getty images)

Much of the drop reflects the US Federal Reserve’s rapid rate hikes to contain inflation — which have sent markets into a tailspin — but some investors are also wary of the prime minister’s willingness to borrow big. to finance growth.

A Reuters poll this week found that 55 percent of international banks and economic consultancies surveyed rated UK assets at high risk of a significant loss of confidence.

On Thursday, the Bank of England said Ms Truss’s energy price cap would curb inflation in the near term, but government stimulus would likely push inflationary pressures further as it fights inflation that has been high for nearly 40 years.

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Kwarteng announces tax cut worth thousands for the rich and nothing for the poorest

The 1.25 percentage point increase in National Insurance introduced by Rishi Sunak will be reversed from 6 November, Chancellor Kwasi Kwarteng announced.

The health and social care tax was intended to alleviate the financial crisis that crippled the health care system.

Treasury figures show that the new move will benefit high earners far more than the poorest:

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Welcome to The Independent’s UK political blog for Friday 23rd September 2022 where we will provide the latest updates from Westminster on Chancellor Kwasi Kwarteng’s mini-budget.