Ahead of his mini-budget on Friday, the chancellor confirmed he was scrapping the 1.25 percentage point rise imposed by his predecessor, Rishi Sunak, to pay for social care and tackling NHS backlogs. Kwarteng said he would also scrap the planned health and social care levy, which was due to come into effect next April to replace the increase in national insurance. The government tabled legislation in the Commons on Thursday to enact the tax changes. Kwarteng said: “Taxing our way to prosperity has never worked. To raise the standard of living for all, we must be unforgiving with the growth of our economy. “Tax cuts are vital to this – and whether businesses reinvest the freed-up cash in new machinery, lower shop prices or increased staff wages, reversing the levy will help them grow while allowing the British public to keep more what do they earn”. The Treasury said most workers will receive a cut in their national insurance contribution directly through their employer’s payroll in their November wages, although some may be delayed until December or January. The levy was expected to raise around £13bn a year to fund social care and deal with the NHS backlog built up by the Covid pandemic. However, Kwarteng said funding for health and social care services would be kept at the same level as if they were still in place. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our site and Google’s Privacy Policy and Terms of Service apply. The graphic showing the annual financial benefits of national insurance increases reversal in households of different incomes The chancellor and Liz Truss argued that lost revenue would be recovered through higher economic growth boosted by tax cuts. But as Kwarteng also prepares to scrap a planned corporate tax hike, some economists have warned of a sharp rise in government borrowing. The Institute for Fiscal Studies said the plan to boost growth was “a gamble at best” and that ministers risked putting public finances on an “unsustainable path”.
