In an effort to alleviate the economic crisis, Chancellor Kwasi Kwarteng has announced a massive “Emergency Budget” that includes a number of tax reductions and other measures.
As part of his plan to break the UK out of its “cycle of stagnation,” Kwasi Kwarteng today compromised with the country’s future by announcing massive tax cuts worth £45 billion.
In a stunning “Emergency Budget,” the Chancellor eliminated the top rate for wealthy earnings and moved up a 1p decrease in the basic rate from next April. This was the greatest assault on the tax burden since 1972.
He rolled back the national insurance rise and canceled a massive increase in corporate tax from 19 pence to 25 pence, as well as capping City bonuses.
Mr. Kwarteng emphasized the need to address a long-term problem in the UK.
He argued that the rate of growth was lower than it should be. We will end this vicious circle. A fresh strategy is required in this modern period.
Because of the stagnant thresholds and rapidly rising inflation, most of the advantage from the income tax reduction will be lost.
Mr. Kwarteng began by praising the government’s decision to freeze energy costs at a typical £2,500 for homes, stating that the government was determined to help with the cost-of-living problem, although he did so while admitting that the price tag will be £60billion only for the first six months.
Concern has been expressed by economists about the large borrowing that will be necessary to close the budget gap.
More than £150 billion may be needed to cover the two-year freeze on energy prices for homes and companies that was announced earlier this month, and another £50 billion may be needed to cover the tax cuts.