Chancellor Kwasi Kwarteng to promise ‘new era for Britain’ with plan for growth in mini-budget | Politics News

Kwasi Kwarteng will promise a “new era for Britain” with a key package of measures aimed at “turning the vicious cycle of stagnation into a cycle of virtuous growth”.

The Prime Minister is expected to announce tens of billions of pounds in both spending increases and tax cuts when he submits his small budget at around 9.30am on Friday.

The statement is expected to include details on how the government will fund energy price ceilings for households and businesses, and put into practice more Prime Ministers Liz Trusspromises to reduce taxes.

The government is treating this as a ‘growth plan’ at a time when the UK is facing cost of living crisisInflation skyrocketed and interest rates climbed.

Speaking about his priorities in a speech to the House of Commons, the prime minister is expected to say: “Growth is not as high as it should be, which makes it harder to pay for public services, require an increase in taxes.

This cycle of stagnation has resulted in tax burdens that are forecast to reach their highest levels since the late 1940s.

“We are determined to break that cycle. We need a new approach to a new era centered on growth.

“Delivery starts today.”

The Prime Minister will say that focusing on growth will lead to higher wages and increased revenue to fund public services, while allowing Britain to compete with other leading economies.

“That’s how we will turn the vicious cycle of stagnation into a virtuous growth cycle,” Mr Kwarteng is expected to say, adding that Ms Truss’ administration will be “bold and unafraid”. shy in the pursuit of growth – even if it means making tough decisions”.

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What can be announced?

The Prime Minister has confirmed in advance of his small budget that the National Insurance increase introduced by Boris Johnson’s government to pay for social care and solve the NHS backlog will be rescheduled to November 6.

He is also expected to cut plans to raise corporate taxes from 19% to 25%, and remove the bonus limit of bankers as part of broader City deregulation.

It is also reported that he will cut stamp duty in a further attempt to spur growth.

Proposals to fast-track the scheduled 1p income tax cuts and wide-ranging VAT cuts from 20% to 15% are also under consideration.

Under his “growth plan”, the prime minister is also expected to announce the creation of new investment zones in dozens of areas across Britain where businesses will be offered tax cuts. have goals and deadlines to increase productivity and create jobs.

The Prime Minister is expected to say that the government is in discussions with 38 combined local government and mayor areas in the UK, including the West Midlands, Tees Valley, Somerset and Hull.

Investment areas will also benefit from the relaxation of zoning laws so that more land can be freed up for residential and commercial development.

The Prime Minister also wants new measures to accelerate about 100 major infrastructure projects, including road, rail and new energy projects, by reducing environmental assessments and regulations. other.

He is expected to say: “The time it takes to get approval for important national projects is getting slower, not faster, while our international competitors are moving away. before.

“We must end this. To support growth nationally, we need to go further, with targeted action in local areas.”

Read more:
Five things to look out for in Friday’s small budget
Truss admits her tax cuts will disproportionately benefit the rich
Who is Kwasi Kwarteng?

Unlike the full budget, which is usually held in November, Mr. Kwarteng will only make a handful of major legislative proposals.

The Prime Minister has faced criticism for refusing to publish a forecast for the UK economic outlook along with his financial statement.

Instead, he said he would provide a timeline for an independent economic forecast from the Office of Budget Responsibility (OBR) in his small budget.

‘From leveling up to dripping’

Some economists have warned of a sharp increase in government borrowing to finance the plans.

It is estimated that the cost of the energy package is up to 150 billion pounds.

Institute for Fiscal Studies says growth-boosting strategy is “a gamble at best” and ministers risked taking public finances down an “unsustainable path”.

Labor also warned of increased risk and said the plans followed 12 years of “low growth and a sharp drop in living standards”.

Pat McFadden, Secretary of the Treasury, said: “The Conservatives have no new plan for economic growth. They have simply moved from incremental to trickle-down and that has not worked in the past. .

“Their choice to finance all of this through borrowing and not trying to finance even a fraction of it through taxes levied on energy companies making the most of the current crisis increases the risk and leaves UK taxpayers paying more in the long run.

“They’re doing all of this at a time when inflation is high and interest rates and mortgage rates are rising.”

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