The chancellor is set to announce tens of billions of pounds in both increased spending and tax cuts when he delivers his mini-budget at around 9.30am on Friday. The statement is expected to include details of how the government will fund the energy price cap for households and businesses and implement many of Prime Minister Liz Truss’ promises to cut taxes. The government is calling it a “growth plan” at a time when the UK is facing a cost of living crisis, soaring inflation and rising interest rates. Speaking about his priorities in a speech to the House of Commons, the chancellor is expected to say: “Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring higher taxes. “This cycle of stagnation has meant that the tax burden is projected to reach its highest levels since the late 1940s. “We are determined to break this cycle. We need a new approach for a new era focused on growth. “The work of tradition begins today.” The chancellor will say a focus on growth will deliver higher wages and raise revenue to fund public services, while allowing Britain to compete with other leading economies. “This is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth,” Mr Kwarteng is expected to say, adding that Ms Truss’s administration will be “bold and unashamed to pursue growth – even when it means making tough decisions ». . Use Chrome browser for more accessible video player 9:31 Truss prepared to be unpopular What could be announced? The chancellor already confirmed ahead of his mini-budget that the rise in National Insurance introduced by Boris Johnson’s government to pay for social care and tackle the NHS backlog will be reversed on 6 November. He is also set to scrap a planned rise in corporation tax from 19% to 25% and scrap caps on bankers’ bonuses as part of wider City liberalization. It has also been reported that it will reduce stamp duty in a further bid to drive growth. Proposals to accelerate the planned income tax cut by 1p and to reduce VAT from 20% to 15% overall are also being considered. Under his “growth plan”, the chancellor is also expected to announce the creation of new investment zones in dozens of areas across England, where businesses will be offered targeted and time-limited tax cuts to boost productivity and create jobs. The chancellor is expected to say the government is in discussions with 38 local and mayoral combined areas in England, including the West Midlands, Tees Valley, Somerset and Hull. Investment zone areas will also benefit from relaxed planning laws so that more land can be freed up for housing and commercial development. The chancellor also wants new measures to speed up around 100 major infrastructure projects, including new roads, railways and energy projects, by reducing environmental assessments and other regulations. He is expected to say: “The time it takes to get consent for projects of national importance is getting slower, not faster, while our international competitors move forward. “We need to end this. To support development across the country, we need to go further, with targeted action in local areas.” Read more: Five things to look out for in Friday’s mini budget Truss admits her tax cuts will disproportionately benefit the rich Who is Kwasi Kwarteng? Unlike a full budget, which would normally take place in November, Mr Kwarteng will table only a few major legislative proposals. The chancellor has faced criticism for refusing to publish a forecast of the UK’s economic outlook alongside his budget statement. Instead, he said he would provide a timetable for an independent economic forecast from the Office for Budget Responsibility (OBR) during his mini-budget. “From Upload to Download” Some economists have warned against a sharp rise in government borrowing to finance the plans. Estimates of the cost of the energy package are as high as £150bn. The Institute for Fiscal Studies said the strategy to boost growth was “a gamble at best” and that ministers risked putting public finances on an “unsustainable path”. Labor also warned of increased risk and said the plans followed 12 years of “low growth and plummeting living standards”. Pat McFadden, shadow chief secretary to the Treasury, said: “The Conservatives have no new plan for economic growth. They’ve just progressed from the ascendant level down and that hasn’t worked in the past. “Their choice to finance all of this through borrowing and not attempt to finance even a fraction of it through a windfall tax on energy companies making the most of the current crisis increases the risk and leaves British taxpayers paying more for longer. “They’re doing all this at a time when inflation is high and interest rates and mortgage rates are already on the rise.”
