The pound fell to a 37-year low after the chancellor unveiled the biggest batch of tax cuts in half a century in a mini-budget branded unsustainable by fiscal experts. In a scathing assessment, the Institute for Fiscal Studies said Kwasi Kwarteng was “betting the house” by putting public debt on an “unsustainable upward trajectory” and “without even a semblance of trying to add up the public finance numbers”. Critics attacked it as benefiting only the rich and big business, Mr Kwarteng’s plan, aimed at raising falling living standards by boosting growth, includes more than £70bn of extra borrowing. In a raft of tax cuts costing up to £45bn a year, he slashed the top rate of tax for the highest earners, cut stamp duty and pushed for a cut in the basic rate of income tax, to 7pm. Mr Kwarteng also confirmed he would overturn the cap on bankers’ bonuses, while adding restrictions to the welfare system. But the price of government borrowing soared even higher amid fears the package had sent British markets crashing. TUC leader Frances O’Grady said: “This budget is Robin Hood in reverse.” Rachel Reeves, the shadow chancellor, said it was “a scheme to reward the already rich”.
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Show latest update 1663902908
Welcome to The Independent’s UK political blog for Friday 23 September 2022, where we’ll be providing the latest updates from Westminster on Chancellor Kwasi Kwarteng’s mini-budget. Namita Singh23 September 2022 04:15 1663903800
Kwarteng announces thousands worth of tax cuts for the rich and nothing for the poor
The 1.25 percentage point rise in National Insurance introduced by Rishi Sunak will be reversed from November 6, Chancellor Kwasi Kwarteng announced. The health and social care levy was intended to relieve the financial crisis that was crippling the care system. Finance Ministry figures show the new move will benefit high earners much more than the poorest:
Kwarteng announces thousands worth of tax cuts for the rich and nothing for the poor
The expected reversal of Rishi Sunak’s National Insurance increase took place in November Jane Dalton23 September 2022 04:30 1663904081
Kwarteng seeks end to ‘cycle of stagnation’
Chancellor Kwasi Kwarteng will detail around £200bn of tax cuts, energy subsidies and planning reforms as part of Prime Minister Liz Truss’ bid to end “Treasury orthodoxy”. Financial markets will also get an initial price on the proposals, as the UK’s Debt Management Office will publish new borrowing plans after Kwarteng finishes his speech. The market scene could hardly be more hostile to the new finance minister. Sterling fell to its lowest level against the dollar since 1985 yesterday, while British government bonds recorded their biggest one-day drop since the start of the pandemic. Chancellor Kwasi Kwarteng arrives at Downing Street for the first Cabinet meeting after Liz Truss took office as the new Prime Minister on September 7, 2022 in London, England (Getty Images) Much of the drop reflects the Federal Reserve’s sharp rate hikes to tame inflation – which sent markets into a tailspin – but some investors are also wary of the prime minister’s willingness to borrow heavily to fund growth. A Reuters poll this week showed 55 percent of international banks and financial advisers polled said British assets were at high risk of a sharp loss of confidence. On Thursday, the Bank of England said Mrs Truss’ energy price cap would curb inflation in the short term, but that government stimulus was likely to add further to inflationary pressures at a time when it is battling inflation near the high 40s. years. Namita Singh23 September 2022 04:34 1663904742
Calls on Liz Truss to honor her pledge to spend £13bn on social care
Councils are calling on the Prime Minister to honor her promise to pump billions into social care as government plans to scrap the new National Insurance levy were confirmed. Ahead of his mini-budget on Friday, Chancellor Kwasi Kwarteng said the tax hike – introduced to pay for social care and tackle the NHS backlog – would be reversed from 6 November. Earlier this week, Liz Truss said her “first priority” in social care is to fund it properly over the winter because there are “far too many” people staying in hospital because of a lack of places. During the campaign, he pledged to put £13 billion into social care. Read the details in this report:
Calls on Liz Truss to honor her pledge to spend £13bn on social care
It comes as Chancellor Kwasi Kwarteng said the increase in national insurance would be reversed from November. Namita Singh23 September 2022 04:45 1663905600
Truss ‘announces stamp duty cut’
The government is set to reduce stamp duty in today’s mini-budget, according to reports. Officials have been working for more than a month on plans to stimulate further growth in the property market and help more young people buy their first home, it is claimed. But critics say the move will worsen the housing crisis, writes Tom Batchelor:
Liz Truss to ‘announce stamp duty cut in mini budget’
The move comes as the average UK house price rose by 15.5 per cent year-on-year in July Jane Dalton23 September 2022 05:00 1663906542
Consumer confidence falls to fourth record low in five months
Consumer confidence has fallen to another new low amid heightened concerns about personal finances in the coming year, data show. GfK’s long-term consumer confidence index fell five points in September to minus 49, the worst reading since records began in 1974. The latest record low is the fourth in five months, with confidence in personal finances over the next year falling nine points to minus 40 and confidence in the economy over the next 12 months down eight points to minus 68. The core shopping index, a measure of confidence in buying big-ticket items, was unchanged at minus 38, but is 32 points lower than this time last year.
Consumer confidence falls to fourth record low in five months
GfK’s long-term consumer confidence index fell five points in September to minus 49, the worst reading since records began in 1974. Namita Singh23 September 2022 05:15 1663907400
Abolish MPs’ post-Budget holiday, say Lib Dems
The Lib Dems are demanding the government call off the impending parliamentary break to allow the chancellor’s mini-budget to be properly scrutinised. MPs were due to break for the conference session yesterday but are now sitting an extra day to make time for Kwasi Kwarteng’s budget statement today, which is expected to implement many of the tax cut promises made by Liz Truss during during the Tory leadership campaign. The Commons are due to return from recess early on October 11. The break was cut short to resume business after the policy was suspended in the wake of the Queen’s death. But the Lib Dems said the break was unnecessary and accused the government of using it to avoid scrutiny. The party has tabled a motion to lift the suspension. Lib Dem Treasury spokeswoman Sarah Olney said: “The Conservative Party spent weeks over the summer talking to each other while the country was in crisis. They are now proposing another unnecessary recess instead of allowing Parliament to properly consider their fiscal plans, which risk loading the country with unsustainable debt.” Jane Dalton23 September 2022 05:30 1663907698
Kwarteng’s ‘dash on growth’ in mini-budget sparks environmental and economic fears
Chancellor Kwasi Kwarteng has unveiled plans to dismantle environmental protections across huge swathes of the UK as part of Liz Truss’ ‘dash for growth’ strategy. The budget will include a “growth plan” that will include measures to tackle high energy prices and inflation and speed up major infrastructure projects, along with a network of investment zones where planning rules will be broken to encourage growth. The plans – which will form a central part of Mr Kwarteng’s emergency budget today – have alarmed green groups, who have warned they are putting the country’s natural beauty at risk from a rash of bad developments, political editor Andrew Woodcock reports.
Kwarteng’s ‘dash for growth’ in mini-budget sparks environmental fears
“Development plan” will break the “cycle of stagnation”, promises the chancellor Namita Singh23 September 2022 05:34 1663908342
John Swinney: UK Government policies are creating more poverty
Scotland’s deputy first minister has claimed UK government policies have created more poverty after a report said the number of children living in poverty in Scotland had risen since 2017. Speaking to BBC Scotland on Thursday night, John Swinney said the Scottish Government was acting against a “wave” of various changes from the UK Government which were “creating more poverty”. A briefing paper published by Audit Scotland on Thursday showed that around a quarter of children in Scotland lived in poverty between 2017-20, a 3 per cent increase on figures collected between 2011 and 2014. “Child poverty is lower in Scotland than in other parts of the UK and this is a consequence of the steps we have taken in relation to measures such as Scotland’s Child Payment,” Mr Swinney said.
John Swinney: UK Government policies are creating more poverty
Scotland’s Deputy First Minister has accused the UK government of creating more poverty with policies such as cuts to universal credit. Namita Singh23 September 2022 05:45 1663909260
Wrong to reveal big tax cuts without OBR forecast, think tank says
The government should not announce major tax cuts without an independent economic forecast from the Office for Budget Responsibility, the head of an economic think tank has warned. The government does not allow the OBR to make the forecasts it normally publishes alongside a budget. But Torsten Bell, chief executive of the Resolution Foundation, said it was…
