Chancellor Kwasi Kwarteng’s financial statement in key points

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Chancellor Kwasi Kwarteng has scrapped the top income tax rate for top earners as he spent tens of billions of pounds in a ‘gamble’ to spur growth during a cost of living crisis.

In a series of major financial announcements on Friday, Mr Kwarteng outlined the planned reduction in the basic rate of income tax to 19p in the pound a year earlier in April and reduced stamp duty for buyers Of house.

Here are the main points of Chancellor Kwasi Kwarteng’s statement on the economy to the Commons:

Mr Kwarteng began by saying that ‘help is coming’ for people with their energy bills, and the Energy Price Guarantee will limit the average household’s bills to £2,500.

The Chancellor outlined the government’s support for businesses, telling MPs the energy bill relief scheme will reduce wholesale energy costs for all UK businesses, charities and the public sector.

He said the consensus among “independent forecasters” was that the government’s energy plan would “reduce peak inflation by around five percentage points”.

Mr Kwarteng said the Bank of England was taking further steps to control inflation and the government viewed the Bank’s independence as “sacrosanct”.

Chancellor of the Exchequer Kwasi Kwarteng (Aaron Chown/PA) (59538472)

The government wants a new approach to growth, said Mr. Kwarteng, with the medium-term objective of achieving a trend growth rate of 2.5%.

Mr Kwarteng said the government will define its fiscal approach in more detail in the future and the Office of Budget Responsibility will release an economic and fiscal forecast before the end of the year, with a second to follow in the new year. .

He said the energy package will cost £60bn for the six months from October.

Mr Kwarteng said there will be announcements in the coming weeks which will cover “the planning system, business regulations, child care, immigration, agricultural productivity and digital infrastructure”.

The government will legislate to impose new conditions on unions wishing to strike, Mr Kwarteng said, so that unions will be required to put wage offers to a vote.

Mr Kwarteng said he would ‘speed up reforms’ to the pension expense cap, so that it no longer applied to ‘well-crafted performance fees’.

The Chancellor announced the government’s plans for new “investment zones” with reduced taxation, which will make it possible to relax town planning rules and reduce corporate taxation to encourage investment.

Mr Kwarteng confirmed his intention to remove the cap on bankers’ bonuses and, to reaffirm the UK’s status as a global financial services centre, the Chancellor said he will ‘introduce an ambitious package of regulatory reforms more late in the fall”.

Mr Kwarteng confirmed that the planned rise in corporation tax would be reversed, so the UK ‘will have the lowest corporate tax rate in the G20’.

Planned alcohol tax increases will be reversed, Mr Kwarteng said, and the government will introduce VAT-free shopping for tourists.

The Chancellor stressed his desire to make the tax system “simpler” and said he would “cut back” the Office for Tax Simplification.

The Chancellor has confirmed to MPs that the healthcare and social services tax introduced by Boris Johnson’s government will be cancelled.

The Chancellor said the Health and Social Care Tax and other planned increases in National Insurance contributions would be canceled “as soon as possible”, on November 6.

Mr Kwarteng confirmed a reduction in stamp duty from Friday, as he told the Commons ‘home ownership is the most common route for people to own property, giving them an interest in the success of our economy and our society”.

He said the top rate of income tax, the 45% rate for income over £150,000, was abolished altogether.

Mr Kwarteng said he would cut the basic income tax rate to 19p in April 2023, a year earlier.



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