Chancellor Kwasi Kwarteng will announce tax cuts worth £30 billion in an emergency budget focused on boosting economic growth.
Prime minister Liz Truss vowed to make tax cuts during the Conservative leadership campaign to provide “immediate” help for families and business struggling with inflation and the cost of living crisis. The Times reports that her chancellor is set to enact the PM’s pledges on Friday (September 23) by reversing the national insurance rise and scrapping the planned rise in corporation tax. Kwarteng will also announce he is lifting the cap on bankers’ bonuses.
A “source” told the Telegraph that the prime minister and chancellor are “focused on growing the size of the pie so everyone gets a bigger slice, rather than descending into a redistributive fight over how we slice and dice the pie.”
The emergency budget will mark a complete u-turn from former chancellor Rishi Sunak who introduced the tax rises in his last budget. During the Tory leadership campaign Sunak warned that Truss’s economic approach would cause an inflationary spiral. Truss claims the cuts will boost growth and thereby pay for themselves.
Kwarteng’s first act as chancellor was to sack the Treasury’s most senior civil servant, Sir Tom Scholar. This week he is set to announce the members of a new Council of Economic Advisers which will give the government alternative advice to that of the Treasury.
The chancellor will also be announcing Big Bang 2.0 – a “financial services package” to make the City of London more competitive by cutting red tape and restrictions.
During Friday’s emergency budget Kwarteng is expected to provide details of the £150bn energy cap package that will keep average household bills at £2,500.
Business secretary Jacob Rees-Mogg is reportedly working this weekend on a support package to help British business. Rees-Mogg will unveil the plan on Wednesday (September 28) following discussions with No 10 and the Treasury.
On Thursday the new health secretary Thérèse Coffey is set to outline her vision for the NHS and the plans she has to take the crisis-hot service through the always difficult winter months.
Kwarteng’s emergency mini-budget on Friday is being called a “fiscal event” by the government. It has been delayed by the mourning period for the dead Queen and the chancellor had to get an extension to the parliamentary session as it was due to rise for its conference recess on Thursday. The Independent reports that MPs are expected to return from recess to Westminster a week earlier than expected on October 10.
The Guardian reports that Kwarteng is expected to deliver a full budget in November.
