Politics

Kwasi Kwarteng’s tax cuts send pound plummeting – mini-Budget live

Energy bill package will cost £60bn in first six months, says chancellor Kwasi Kwarteng

The pound plummeted to a 37-year low after the chancellor unveiled the biggest raft of tax cuts for half a century in a mini-Budget slated by fiscal experts as unsustainable.

In a scathing assessment, the Institute of Fiscal Studies said Kwasi Kwarteng was “betting the house” by putting government debt on an “unsustainable rising path” and “without even a semblance of an effort to make the public finance numbers add up”.

Critics attacked it as benefiting only the wealthy and big business,

Mr Kwarteng’s plan, aimed at raising falling living standards by boosting growth, involves more than £70 billion of extra borrowing.

In a raft of tax cuts costing up to £45 billion annually, he scrapped the top rate of tax for the highest earners, cut stamp duty and brought forward a cut to the basic rate of income tax, to 19p.

Mr Kwarteng also confirmed he will axe 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 UK markets into meltdown.

TUC leader Frances O’Grady said: “This budget is Robin Hood in reverse.”

Rachel Reeves, the shadow chancellor, said it was “a plan to reward the already wealthy”.

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Mini budget ‘totally out of touch’, says Davey

Liberal Democrat leader Sir Ed Davey has said the government’s mini budget was “totally out of touch” with the public.

“Millions of families and pensioners are struggling with soaring bills on energy, on food, on mortgages, and it looks like the Conservatives either don’t get it or don’t care,” he said.

He added: “It looks to me like investors around the world are very worried about this economic package, whether it’s the currency markets with the pound falling, whether it’s the cost of government borrowing, which has gone up on the back of this, I think people are signalling no confidence in the Conservatives.

“So, it’s not just members of the public who are struggling who feel that the Government is out of touch, it’s international investors also.”

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UK ‘technically’ in recession, says chancellor

The chancellor has admitted that the UK is “technically” in recession.

Kwasi Kwarteng told the BBC: “Technically, the Bank of England said that there was a recession, I think it’ll be shallow and I hope that we can rebound and grow.”

However, he later said he did not acknowledge there was a recession.

“We’ve had two quarters of very little, negative growth and I think these measures are going to help us drive growth,” he added.

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What he said – and what he really meant

John Rentoul interprets the chancellor’s speech for you:

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‘Staggering’ plan, says money expert

Money-saving expert Martin Lewis has described the government’s new financial plan as staggering, saying he worries what will happen if growth does not materialise. Furvah Shah reports:

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Key mini-Budget takeaways

After the chancellor unveiled Liz Truss government’s plans to revive the UK economy, Joe Sommerlad rounds up the vital points:

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Energy package will cost £60bn, says chancellor

The government support package to cap energy bills from October will cost £60bn in the first six months alone, the chancellor said. Adam Forrest reports:

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Children ‘face hungry Christmas as Kwarteng prioritises bankers’

Children are facing a “cold, hungry Christmas” after the chancellor’s economic plan “prioritised bankers’ bonuses” over the hardest-hit families, charities have warned, writes Chiara Giordano:

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Six in 10 say mini-Budget mainly benefits rich

Over six in ten Britons (63 per cent) say the chancellor’s mini-budget will mainly benefit the wealthy, according to YouGov.

Just 3 per cent say it will benefit poorer people more, the findings show.

Only one in five (19 per cent) say the measures will be effective at growing the economy, while more than half (52%) say the measures will not be effective at this.

Three in 10 (28 per cent) say the measures will make people like them worse off, with a third (34 per cent) saying it will make no difference.

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Labour will fight scrapping of top rate of income tax

The shadow chancellor Rachel Reeves said she was not convinced that the government would get its plan to axe 45 per cent higher income tax rate through parliament.

“We will fight tooth and nail to stop that cut in taxes for the very wealthiest in society,” she told LBC.

“I’m not sure that this proposed cut in tax is going to survive contact with reality. And we will work with MPs across the house in trying to stop this.”

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Pound drops to 37-year low – what does it mean for you?

The pound had its worst day since the early days of the pandemic – and it is likely to leave the average household around £150 worse off every year. Read how:

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