The new chancellor outlined his economic vision for the country (Picture: Getty Images)
Chancellor Kwasi Kwarteng delivered his highly anticipated mini-budget this morning, which included massive changes to parts of the UK economy.
Lots of changes were announced by the government, as well as plans about how they will deal with the cost of living crisis.
He said today was the start of a ‘new era’ for the government – but faced criticism that his budget was helping the wealthy and doing little to benefit ordinary people.
We took a look the major points addressed by the Chancellor today.
Energy bills crisis
Mr Kwarteng said ‘help is coming’ for people to pay for their energy bills, with the government pledging the energy price guarantee will limit bills for the average household to £2,500, saving households on average £1,000 a year.
He said the energy bill relief scheme will reduce wholesale energy costs for all UK businesses, charities and the public sector.
Income tax cuts
Mr Kwarteng said he will cut the basic rate of income tax to 19p in April 2023, one year early.
The top rate of income tax, the 45% rate for earnings more than £150,000, is being abolished altogether.
Cuts to stamp duty
A cut to stamp duty was announced as he told the Commons ‘homeownership is the most common route for people to own an asset, giving them a stake in the success of our economy and society’.
From today, the rate where home buyers start to pay stamp duty will double to £250,000.
The rate at which first time buyers start paying stamp duty would also be raised, this time to £425,000.
And he increased the value of the property on which first-time buyers can claim the relief, from £500,000 to £625,000.
He said this would take 200,000 people out of paying the tax altogether, and was a ‘permanent’ cut rather than just a holiday.
Planned rises in National Insurance Contributions
Boris Johnson’s government said it would raise National Insurance contributions to help pay for the Covid-19 pandemic response.
But Mr Kwarteng cancelled the health and social care levy, and other planned rises in national insurance contributions.
This will take effect from the earliest possible moment’, which is November 6.
He outlined his desire to make the tax system ‘simpler’ and said he would ‘wind down’ the Office of Tax Simplification.
Alcohol duty rises cancelled
Alcohol duty rises will be cancelled, with Mr Kwarteng saying the government will also introduce VAT-free shopping for tourists.
Corporation tax slashed
The planned rise in corporation tax will also be slashed, so the UK ‘will have the lowest rate of corporation tax in the G20’.
Corporation tax rise …read more