Mini-budget 2022 latest: Kwarteng cuts stamp duty and top rate of income tax

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

Kwasi Kwarteng has cut stamp duty and axed the higher income tax in a mini-budget which Labour has called a “plan to reward the already wealthy”.

The chancellor revealed tens of billions in extra spending and tax cuts in plans to boost economic growth.

This also included scrapping a cap on bankers’ bonuses and a planned increase in corporation tax on big business profits.

The government dubbed the mini-budget as a “growth plan” as the UK faces a cost-of-living crisis, recession, soaring inflation and climbing interest rates.

It has been criticsed by politicians, unions and charities, who said the richest in the country – rather than the poorest – would reap the benefits.

Rachel Reeves, the shadow chancellor said: “The chancellor has made clear who his priorities are today – not a plan for growth, a plan to reward the already wealthy.”

Meanwhile the Child Action Poverty Group said it was a statement “for the 1 per cent” which said “more about bankers’ bonuses than helping hungry kids”.

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Lib Dem slams budget as ‘shameful’

“Tax cuts for the rich are prioritised whilst the average family struggles to make ends meet. It is shameful,” Wera Hobhouse from the Liberal Democrats says:

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No distributional analysis for ‘staggering huge tax cut for richer households’

A think tank boss said there is no distrubution analysis from the government this time over the announced policies…

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Mini-budget ‘reward for already wealthy’, Labour says

Earlier in parliament, the shadow chancellor criticised the mini-budget as benefitting the rich.

Rachel Reeves said: “The chancellor has made clear who his priorities are today – not a plan for growth, a plan to reward the already wealthy. A return to the trickle-down of the past, back to the future, not a brave new era.”

She added: “If you are a pensioner worried about the cost of living, a working family seeing your mortgage rate going up, a small business whose costs are spiralling, the government’s announcements today do little to reassure them.

“Bigger bonuses for bankers, huge profits for energy giants, shamelessly shielded by Downing Street, and all the while ministers pile the crushing weight of all of these costs onto the backs of taxpayers.”

Rachel Reeves says mini-budget is ‘reward for already wealthy’

(Parliament TV)

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Full story: Planned rise to alcohol duty scrapped

Kwasi Kwarteng scrapped a planned increase on alcohol duty in his mini-budget as he set out plans for billions of pounds worth of tax cuts and more borrowing, Matt Mathers writes.

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Graph: Pound plunges after mini-budget

We mentioned the pound had dropped to a 37-year low following the mini-budget earlier.

This chart shows how it has plunged:

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Full story: Kwarteng announces cuts to stamp duty

Kwasi Kwarteng has abolished stamp duty on homes worth up to £250,000 in a bid to boost the property market, Andrew Woodcock reports.

The chancellor said that his move – effective immediately – would take 200,000 people out of stamp duty altogether:

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Key points from mini-budget

Despite the name, the mini-budget has announced quite a few changes for the UK.

Here is a run-through of the main ones:

  • Top rate of income tax for the highest earners abolished. Those on more than £150,000 a year will no longer pay45 per cent but instead the lower 40 per cent rate applicable to those on over £50,271
  • Cap on bankers’ bonuses axed
  • Planned increase to corporation tax scrapped
  • Cut to basic rate of income tax brought forward
  • Cut to stamp duty which means 200,000 fewer people will pay the tax on house purchases
  • VAT-free shopping introduced for overseas visitors
  • Legislation to force trade unions to put pay offers to a member vote so strikes can only be called once negotiations have fully broken down
  • Confirmation of plans to make around 120,000 more people on Universal Credit take active steps to seek more and better paid work or face having their benefits reduced
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Tax cuts worth tens of billions

The government’s mini-budget is estimated to contain total tax cuts of £45bn by 2026-27, according to figures published by the Treasury.

Government estimates also indicate that tax cuts in 2023-24 will be worth nearly £27bn.

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Green Party says UK in throes of ‘inequality economics’

Caroline Lucas from the Green Party has said the UK is facing “inequality economics” following the mini-budget.

“This isn’t a budget to tackle the cost of living scandal, the energy bills crisis, or the climate emergency – it’s a budget of free cash giveaways to rich fatcats and city bankers, and crumbs on the table for everyone else,” she said.

Caroline Lucas says budget leaves ‘crumbs on table’ for most

(Getty Images)

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‘This was a statement for the 1 per cent,’ charity says

Following the mini-budget, Alison Garnham from the Child Poverty Action Group said: “Despite his rhetoric about supporting families, this was in reality a statement for the 1 per cent, saying more about bankers’ bonuses than helping hungry kids.”

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