Money-saving expert Martin Lewis described the government’s new financial plan as “staggering” after Chancellor Kwasi Kwarteng unveiled a mini-budget packed with sweeping tax cuts.
The chancellor insisted Friday morning that “help is coming” for those struggling to pay their energy bills, but also abolished the highest income tax rate for Britain’s highest earners.
He also revealed that the government’s energy bill support package could cost £60 billion in the first six months from October.
Commenting on the mini-Budget, Mr Lewis, founder of Money Saving Expert, tweeted: “That was a really staggering statement from a Conservative Party government. Huge new loans while cutting taxes at the same time.
“It’s all aimed at growing the economy. I really hope it works. I’m really worried what will happen if it does.”
On cutting the top tax rates, Mr Lewis explained: “From April next year, the 45 per cent top tax rate (applicable to those earning £150,000) will be scrapped. The highest rate will therefore be the 40 percent higher rate limit.
“This means mega earners pay the same rate as that of £50,000.”
Mr Kwarteng said tax cuts are “central to solving the puzzle of growth” during the current cost of living crisis.
The Treasury estimates that tax cuts, including Liz Truss’ promises to reduce the rise in national insurance and corporate taxes, will cost nearly £45 billion a year by 2026.
Other announcements include a cut in stamp duties, meaning 200,000 fewer people will pay home purchase taxes, tax-free shopping for foreign visitors, legal restrictions on unions regarding strikes, and plans to get more people with Universal Credit active steps. undertaking to work or being confronted with reduced benefits.
Mr. Kwarteng said his economic outlook would “turn the vicious circle of stagnation into a virtuous cycle of growth”.
But shadow chancellor Rachel Reeves said the plan is an “admission of 12 years of economic failure” under conservative governments.
“Never has a government spent so much and explained so little,” she said.