Kwarteng to announce £30bn of tax cuts in mini-budget – reports
Kwasi Kwarteng is preparing to announce £30bn of tax cuts in an effort to ease the pressure of the cost of living crisis and boost economic growth, according to reports.
It is thought the chancellor will outline plans to reverse the recent national insurance rise and freeze corporation tax in an emergency mini-budget on Friday.
However, the tax cuts could breach the fiscal rule that requires national debt to fall as a share of national income between 2024-25.
Kwarteng is likely to extend the target beyond this into the next parliament in an attempt to tackle the “economic shocks” felt by the country, according to the Times.
The recently-appointed chancellor is also expected to announce controversial plans to ditch caps on bankers’ bonuses during the financial statement next week.
Kwarteng’s mini-budget will come at the end of what was expected to be a hectic return to politics after the Queen’s funeral on Monday. The business secretary, Jacob Rees-Mogg, is likely to set out further details of the government’s plans to help companies through the energy crisis. And the health secretary and deputy prime minister, Thérèse Coffey, is expected on Thursday to outline her vision to take the NHS through the winter months.
“If we have the £30bn of tax cuts, and we know that the economy is doing less well than it was, they may well change the rules,” Paul Johnson, director of the Institute for Fiscal Studies, said.
“When you’ve got a slowing economy and you’re cutting taxes then clearly that’s going to lead to more government borrowing and therefore debt, increasing the risk that you break the fiscal rules.”
The chancellor’s tax cuts follow the government’s announcement of a £150bn energy cap to help with the cost of rising bills, freezing
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