Today, Chancellor Kwarteng announced a new era of economic growth with the Government’s Growth Plan. This unashamed approach will expand the supply side through tax cuts and reform, tackle the immediate energy crisis, remove barriers for business, and build the infrastructure we need to grow the British economy.
In today’s new Growth Plan, the Chancellor announced the following changes to get the British economy back on track:
- Energy Package: A new energy package – worth £60bn over the next 6 months – will support households and businesses across the UK with the increasing cost of energy.
- Cut on Basic Rate Income Tax: Basic rate of income tax will be cut to 19p a year earlier from April 2023, with the 45% higher rate "abolished" and replaced with a single higher rate of 40%.
- Tax cut on Stamp Duty: The Government will cut stamp duty land tax, with the limit raised to £250,000 or £425,000 for first-time buyers.
- Scrapping the Raise in Corporation Tax: The planned increase in corporation tax has been cancelled, so it will remain at 19% - the lowest rate of corporation tax in the G20 – putting £19bn a year back into the economy.
- Reforming Banker’s Bonuses: Scrap the cap on bankers' bonuses and replace it with regulatory reforms, reaffirming the UK’s status as the financial services hub of the world.
- Action on Unions: Legislation to require unions to put pay offers to a member vote to ensure strikes can only be called once negotiations have broken down.
- A Fairer Benefits System for the British People: Reduced benefits if people do not fulfil their job searching commitments.
- Scrapped Duty Rate on Alcohol: The planned duty rates increase on beer, wine and spirits is cancelled.
- Reforming the Pensions System: Reform the pension charge cap, so pension funds can invest more easily in UK assets, benefiting savers, boosting economic growth, and incentivising investment into Britain’s science and tech companies.
- Scrapping EU Red Tape: A new bill will unpick the complex patchwork of planning restrictions and EU-derived laws that constrain our growth.
- Tax Cuts for Businesses: Cut taxes for businesses in designated tax sites for 10 years.
- Reformed VAT: VAT-free shopping for overseas visitors.
This plan is unapologetically ambitious, with an aim to achieve a trend growth rate of 2.5% for the UK economy; we’ve done it before, we can do it again. You can read the new Growth Plan in full HERE.