FAMILIES have today been given a lifeline as Kwasi Kwarteng swung an axe at income tax to face down the cost of living crisis.
The Chancellor this morning revealed the basic rate of income tax would be slashed to 19p from April next year – saving 31 MILLION families an average £170 a year.
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Thirty massive money policies were introduced in today’s mini budget bonanza, that sees £45bn worth of tax cuts to encourage economic growth.
The Treasury insists the huge cuts will be paid for over time by the economic growth they unleash.
Mr Kwarteng said: “We will deliver higher wages, greater opportunities, and fund public services, now and into the future.
“That is how we will compete successfully with dynamic economies around the world. That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth.”
In other mini budget developments…
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To help keep more money in hard working people’s pockets, April’s 1.25 percentage point rise in National Insurance will be binned from November 6 this year.
The cut will save 28 million people an average of £135 in 2022 — and £330 next year.
To help vulnerable Brits with eye watering energy costs, a price cap will freeze bills at £2,500 from October 1 for two years.
The first six months of the cap alone will cost the government a whopping £60 billion.
The Chancellor said: “The Prime Minister has acted with great speed to announce one of the most significant interventions the British state has ever made.
“People need to know that help is coming. And help is indeed coming.”
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To kickstart a homebuying revolution, the Chancellor confirmed the threshold for paying stamp duty has shot up from £125,000 to £250,000.
The move will benefit around 200,000 homebuyers each year.
And in a major win for first time buyers, the stamp duty threshold has risen from £300,000 to £425,000.
To turbocharge homebuilding, taxes will be slashed for thousands of Brits living in 38 new investment zones.
Ultra low tax and low regulation areas of the country are part of Liz Truss’ plans to turbocharge the economy in targeted areas.
Businesses that move to the new zones will have their levies slashed and be freed from red tape.
Alongside growing the housing sector, in a mammoth mission to make London the number one destination for business, Mr Kwarteng unleashed a tidal wave of corporate red tape and tax cuts.
A planned rise in Corporation Tax from 19 to 25 per cent, due next April, was axed.
And the cap on bankers’ bonuses was thrown in the bin.
The fat cat bonus cap was introduced by the EU in the aftermath of the 2007-2008 financial crash.
The government thinks the policies will entice finance firms to London over rivals New York, Paris and Frankfurt.
“That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth,” the Chancellor said.
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Boozers were handed a huge boost as alcohol price hikes were scrapped.
Mr Kwarteng said he had “listened to industry concerns” about future rises to alcohol duty – which would see the cost of a pint rocket.
And in response, he said planned hikes to duty rates for beer, for cider, for wine, and for spirits “will all be cancelled”.
The Chancellor said he would introduce an “18-month transition” for wine duty, while extending draught relief to help smaller breweries.
Tourists from abroad also rejoiced today as Mr Kwarteng confirmed duty free shopping will once again be available OUTSIDE airports.
Holidaymakers will be able to treat themselves to cheaper goodies across the UK in a major boost for the British economy.
Rishi Sunak removed the tourist tax rebate when he was Chancellor.
But Mr Kwarteng insisted that bringing it back will entice holiday goers to spend more on British businesses.
Responding to today’s mini budget, Shadow Chancellor Rachel Reeves hit out at Mr Kwarteng, accusing him of having no plan for growth and only rewarding the rich.
She said: “The Conservatives chose to shield the eye-watering windfall profits of the energy giants, leaving tens of billions of pounds untouched.
“Borrowing is higher than it needs to be, just as interest rates rise.
“This is casino economics – gambling the mortgages and finances of every family in the country to keep the Tory party happy.
“The Chancellor has made clear today what his priorities are. Not a plan for growth, a plan to reward the already wealthy. A return to the trickle down of the past, not a brave new future.”
