Kwasi Kwarteng has abolished the top rate of income tax in a £10,000-a-year surprise Budget boost for the very richest Brits.
The Chancellor told MPs he was getting rid of the 45p additional rate for the richest 1% from April 2023. Instead of paying 45p, they will pay 40p in every pound they earn over £150,000 a year.
Treasury officials believe this could save 660,000 people a whopping £10,000 a year each.
Mr Kwarteng also announced the promised 1p cut in the basic rate of income tax from April 2024 will be brought forward to April 2023, affecting around 31 million taxpayers, according to the Treasury.
The top Tory vowed that his economic vision would "turn the vicious cycle of stagnation into a virtuous cycle of growth" as Liz Truss's Government bets the house on tax cuts to get the economy back on course.
Mr Kwarteng tore up his predecessor Rishi Sunak's plans, cancelling the scheduled rise in corporation tax - which will remain at 19% - and confirming that the 1.25 percentage point rise in National Insurance contributions will be reversed in November 6.
He also handed a massive boost to millionaire bankers by scrapping a cap on bonuses handed out by City bosses.
Stamp duty paid on house and land purchases will be cut in England and Northern Ireland from today , he revealed.
The threshold for the levy has been increase, meaning house buyers won't pay stamp duty on first £250,000.
For first time buyers the threshold rises from £300,000 to £425,000. They can access the relief when they buy a property costing less than £625,000, instead of the current £500,000.
The pound dropped to a fresh 37-year-low against the dollar as the Chancellor unveiled his "growth plan" for the UK economy.
The new Treasury chief kicked off his mini-Budget in the Commons by restating the Government's plans to freeze energy bills for a typical household at £2,500-a-year for the next two years.
He claimed this would save households an expected £1,400 this year, while millions of the most vulnerable households will receive additional payments, taking their total savings this year to £2,200.
Mr Kwarteng revealed that the energy package could cost an estimated £60 billion over the first six months, which is nearly as much as the Covid furlough scheme.
He also announced VAT-free shopping for overseas visitors and said planned increases in the duty rates for beer, cider, wine and spirits would be cancelled.
The top Tory confirmed there would be a new benefits crackdown, which will raise the number of hours people on Universal Credit have to work before they can stop "actively" seeking a job.
Now the government plans to raise it again in January to 15 hours a week. People will risk having their benefits sanctioned if they fail to take active steps to boost their earnings and meet regularly with a work coach.
The Chancellor also set himself on a collision course with trade unions, by announcing plans to legislate to force them to put all pay offers to a members vote.
The Treasury said the total package would be funded by increasing borrowing by an eye-watering £72.4 billion.
Mr Kwarteng was jeered by Labour MPs, when he claimed "this is the beginning of a new era" after 12 years of Tory Governments.
Shadow Chancellor Rachel Reeves said he had provided an "admission of 12 years of economic failure" by the Government.
She said: "Can I thank the Chancellor on his comprehensive demolition of the record of that last 12 years.
"Their record, their failure, their vicious circle of stagnation."
She added: "When the Prime Minister says she wants to break free from the past, what she really means to say is that she wants to break free from her own failed record, because where have the last 12 years left us?
"Lower growth, lower investment, lower productivity and today we learn that we have the lowest consumer confidence since records began.
"The only things that are going up are inflation, interest rates and banker bonuses."
Paul Johnson, from the respected Institute for Fiscal Studies, said it was the "biggest tax-cutting event since 1972" and branded it a "quite extraordinary" statement
"It was like having an entirely new Government. This was the biggest tax-cutting event since 1972, it is not very mini. It is half a century since we have seen tax cuts announced on this scale."
The Chancellor was accused of "Robin Hood in reverse" economics leaving struggling families "out in the cold" while rewarding "spivs and speculators".
Frances O’Grady, who heads the TUC, said: “This budget is Robin Hood in reverse. We should be rewarding work, not wealth. But at the first opportunity, Liz Truss is holding down wages and lining the pockets of big corporations and City bankers. The party of pay cuts strikes again.
“We need a very different plan in the full autumn budget to do right by workers. The Chancellor should boost the minimum wage, universal credit and pensions before winter sets in. He should fund pay rises in the public sector that keep up with prices."
Gary Smith, GMB General Secretary, said: “The Chancellor is tough on care workers’ pay rises and soft on bankers’ bonuses – today’s announcement has set in stone an economy that’s rigged against working people.
“Our members want an economic policy that works for all, not just the spivs and speculators who have done very well out of a Tory Government."
Rebecca McDonald, chief economist at the Joseph Rowntree Foundation, said: ""This is a budget that has wilfully ignored families struggling through a cost of living emergency and instead targeted its action at the richest. It leaves those on the lowest incomes out in the cold with no extra help to get them through the winter.
"Families on low incomes can’t wait for the promised benefits of economic growth to trickle down into their pockets. The energy price cap fixes bills at a level already unaffordable for many and was never going to be enough to solve the problem for those on the lowest incomes. With food prices rising more sharply than inflation, and no action today, it will be a bitter winter ahead."
She added that the government had chosen to "turn its back on millions" who are on the lowest incomes - saying they will be forced to cut back on food and energy this winter.
