BIGGEST TAX CUTS FOR 30 YEARS!

Chancellor vows ‘new era for Britain’ as he unveils a massive package of measures to turbo-charge growth

THE Chancellor will hail ‘a new approach for a new era’ of economic growth today as he unveils the biggest tax giveaway in more than 30 years.

Pledging to break the ‘cycle of stagnation’ that has left Britain with a soaring tax burden, Kwasi Kwarteng will outline a string of measures to help families and boost business.

He will announce a ‘growth plan’ with 30 measures to tackle high energy bills, drive down inflation and cut taxes to boost growth. It will include UK-wide measures to reverse the hated national insurance hike and scrap the planned rise in corporation tax, as well as a reduction in stamp duty in England.

Government sources indicated that there could still be another ‘rabbit out of the hat’ announcement, with speculation that the basic rate of income tax could be cut by 1p next year.

But Scots won’t benefit from the stamp duty cut as SnP ministers have refused to commit to cutting the land and buildings

transaction tax (LBTT). And any move to cut income tax in England could lead to a widening of the cross-Border tax gap. People earning more than £27,850 in Scotland already pay more tax than workers in England. The Chancellor’s statement comes after:

▪ The Bank of England yesterday hiked interest rates by 0.5 percentage points to 2.25 per cent, the highest level since 2008;

▪ The bank also declared that the economy is shrinking, but a deep recession may be averted and inflation will be lower as a result of the Government’s energy price cap;

▪ Business Secretary Jacob Rees-Mogg announced that the ban on fracking in England has been lifted – but SNP ministers refused to follow suit in Scotland;

▪ The Chancellor confirmed that the national insurance hike will be reversed from November 6;

▪ Universal Credit claimants could have their benefits cut unless they take active steps to work at least 15 hours a week at the national living wage.

Mr Kwarteng is expected to tell MPs today: ‘Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise.

‘This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s. We are determined to break that cycle. We need a new approach for a new era focused on growth.

‘That is how we will deliver higher wages, greater opportunities and sufficient revenue to fund public services, now and in the future. That is how we will compete successfully with dynamic economies around the world. That’s how we will turn the vicious cycle of stagnation into a virtuous cycle of growth.

‘We will be bold and unashamed in pursuing growth, even where that means taking difficult decisions. The work of delivery begins today.’

Today’s fiscal statement has been billed as a ‘mini-Budget’, but yesterday the Institute for Fiscal Studies (IFS) think-tank said it would amount to the biggest tax giveaway in three decades.

Then-Chancellor Lord Lawson delighted Tory MPs in 1988 when he used his Budget to slash income tax, cutting the basic rate by 2p in the pound and scrapping all higher rates above 40 per cent.

IFS director Paul Johnson said: ‘This will actually, we think, be the biggest tax-cutting fiscal event since Nigel Lawson’s Budget of 1988. So it may not be a Budget but in terms of tax cuts it is going to be bigger than any Budget for more than 30 years.’

Mr Johnson said with £30billion of tax cuts, the budget deficit could hit around £100billion in three year’s time, which would ‘put debt on an unsustainable path’. He said if there is a big increase in economic growth then ‘all becomes easier’, but added: ‘There is no guarantee of that.’

The IFS also warned that median earners will be £500 worse off in real terms this year despite the massive package of support to deal with the cost of living crisis.

Liz Cameron, of the Scottish Chambers of Commerce, said the national insurance cut was ‘very welcome’ and will help firms which are struggling to recruit.

But she added: ‘There is undoubtedly more to be done, with tomorrow’s fiscal statement from the Chancellor being the perfect opportunity for the UK Government to put forward a clear-long term plan to support businesses through the cost emergency and beyond.’

Any stamp duty or income tax cuts, or any other investments in England in areas which are devolved, will result in a funding boost for the Scottish Government, which can then decide whether to follow the move or spend the money elsewhere. Deputy First

Minister John Swinney signalled to MSPs on Wednesday that he opposed the UK Government’s tax cut plans, which he said ‘run the risk of increasing inequality in our society’.

Scottish Tory finance spokesman Liz Smith said: ‘People across the country are facing an extremely tough winter.

‘The UK Government has already provided huge support for families and businesses, with more help expected today. It is up to the SNP to guarantee they will pass on any and all further support to people in Scotland – including any tax cuts.’

A Scottish Government spokesman said: ‘Scottish ministers will take account of the impact of the UK Government’s fiscal plans once they are published on Friday.’

‘A new approach for a new era’

WHEN Kwasi Kwarteng delivers his mini-Budget today, it promises not only to be the most significant fiscal occasion in decades, but – whisper it softly – it might be the moment Conservatism awakens from its coma.

Under recent Tory governments, the party has shifted away from free market principles and embraced big state Treasury orthodoxy that drove the tax burden to an 80-year high. Thankfully, the Chancellor is determined to drag the country off that disastrous path.

Instead, he and Prime Minister Liz Truss are taking a more radical approach, aiming to turbo-charge growth. That is why the centrepiece of the mini-Budget is the biggest tax giveaway since the 1980s.

Mr Kwarteng will reverse the national insurance hike, scrap the planned rise in corporation tax and cut stamp duty for homes in England. We can but hope the Scottish Government will follow suit.

A bonfire of red tape will lift the shackles on business and accelerate infrastructure projects.

When his predecessor, Nigel Lawson, cut tax rates, productivity soared and the Treasury’s tax take actually went up.

Low taxes work – morally, practically and electorally. They put more money in people’s pockets, create jobs and foster a climate where business and wealth creation can thrive.

The Bank of England’s interest rate rise to 2.25 per cent, aimed at tackling rampant inflation, however, will be a mighty shock to mortgage payers.

There will, of course, be relentless shroudwaving from the Left and the BBC, who claim Mr Kwarteng’s audacious agenda merely benefits the rich. But they are wrong and he must stick to his guns.

With the country heading into recession, we can’t afford to surrender to the failed economic consensus.

The Government must do all in its power to stimulate growth.

If the country becomes more prosperous, everyone gets richer – and the Tories will enjoy a political windfall.