Kwarteng says ‘more is to come’ after UK tax gift

Britain’s Chancellor of the Exchequer, Kwasi Kwarteng, pledged more tax cuts in his quest for growth after unveiling the biggest tax giveaway in half a century.

Warteng’s package on Friday abolished the top tier of income tax and cut the property tax rate by a percentage point, while reversing an increase in the Social Security payroll tax introduced earlier this year.

“There’s more to come,” Kwarteng said in a BBC television interview on Sunday. “We’ve only been here 19 days. I want to see people keep more of their income next year because I believe it’s the British who are going to drive this economy.”

The Chancellor’s comments suggest that Prime Minister Liz Truss’ government is undeterred by the market chaos unleashed by her “growth plan” – which amounts to a budget in all but name.

“I don’t comment on market movements,” Kwarteng said while standing behind his plans. “There’s no way we’re going to get more growth just by raising taxes and taking more money from people,” he said.

His comments clear water between the Tories and Labor after the ruling party passed opposition policies this year including a windfall tax on energy giants and a freeze on domestic electricity and gas bills. Labor leader Keir Starmer told the BBC on Sunday he would reintroduce the top income tax rate.

While Kwarteng didn’t elaborate on possible future tax cuts, the Telegraph reported late Saturday that he was considering introducing further income tax cuts and rebates for savers and child support recipients in a full household next year.

The Treasury put the cost of Friday’s tax announcements at around £161 billion over the next five years, in addition to the £60 billion cost of the Government’s energy bailout for homes and businesses over the next six months. This has led investors to worry that the approach will add to already surging inflation and drive up debt.

But the Chancellor told the BBC he was “confident” the Bank of England could cope with runaway inflation and pledged to present a “medium-term financial plan” in the coming months that includes a commitment to calculate net debt as a percentage reduce gross domestic product.

The Tory approach – which benefits high earners far more than the poorest Britons – offers Labor fertile ground “to occupy that centrepiece,” Labor grandee Peter Mandelson – who served in former Labor Prime Minister Tony Blair’s cabinet – told Sky News on Sunday as the opposition party began its four-day annual conference in Liverpool, north west England.

“The Conservatives are actually taking their own political direction from the centre, the middle ground of British politics,” Mandelson said. “There is a group of voters in the country who will decide the outcome of the next election.”

Starmer told the BBC he would reverse Kwarteng’s abolition of the 45 per cent top income tax, which is levied on those earning more than £150,000 but retain the one percentage point cut in the property tax rate.

He called the argument “that if you just allow the rich to get richer, that money will somehow go into the pockets of all of us” as “false”.

Former Tory Chancellor Ken Clarke echoed this view, telling BBC radio on Sunday he didn’t think tax cuts for the wealthiest would boost growth. “I’m afraid something like this is usually tried in Latin American countries without success,” he said.

Labor has a comfortable poll lead over the Tories for most of 2022, and on Sunday a new poll conducted by Savanta ComRes for website LabourList gave the opposition a 12-point lead over the ruling party. The poll was conducted ahead of Kwarteng’s statement and the seat-by-seat analysis showed Labor is on track for a 56-seat majority in the next election, which Truss is due to call no later than January 2025.

https://www.independent.ie/business/world/kwarteng-says-there-is-more-to-come-after-uk-tax-giveaway-42015510.html Kwarteng says ‘more is to come’ after UK tax gift

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button