Chancellor Kwasi Kwarteng will today promise to “turn the vicious cycle of stagnation into a virtuous cycle of growth” in his mini-budget speech setting out the Government's plans to grow the UK economy.
The Chancellor is set to offer both tax cuts and billions of pounds of increased spending when he speaks in the House of Commons from 9.30am today.
He is set to reveal how the Government will pay for the energy price caps that have been announced for both households and businesses.
READ MORE: Chancellor set to unveil plans for new 'investment zones' to boost local economies
The UK faces a cost of living crisis with soaring inflation, rising energy prices, and climbing interest rates. The Bank of England yesterday indicated the UK was already in recession.
Mr Kwarteng is expected to tell the House of Commons: “Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise.
“This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s.
“We are determined to break that cycle. We need a new approach for a new era focused on growth.”
Mr Kwarteng is expected to add that Ms Truss’s administration will be “bold and unashamed in pursuing growth – even where that means taking difficult decisions”.
The Chancellor has already confirmed that the recent hike in national insurance will be reversed.
He is also set to axe the planned increase in corporation tax from 19% to 25%, and scrap the cap on bankers’ bonuses as part of wider City deregulation.
It's also being widely reported that he will cut stamp duty in a further attempt to drive growth, while other proposals reportedly being considered include fast-tracking a 1p cut in income tax and even cutting VAT across the board.
The Government is also in talks with local authorities across the country to establish new low-tax investment zones, while the Chancellor also wants to speed up dozens of major infrastructure projects.
He is expected to say: "The time it takes to get consent for nationally significant projects is getting slower, not quicker, while our international competitors forge ahead. We have to end this."
Labour said the plans followed 12 years of “low growth and plummeting living standards”.
Pat McFadden, shadow chief secretary to the Treasury, said: “The Conservatives don’t have a new plan for economic growth. They have simply moved from levelling up to trickle down and that has not worked in the past.
“Their choice to fund all of this through borrowing and not attempt to fund even a proportion of it through a windfall tax on the energy companies making the most from the current crisis increases risk and leaves British taxpayers paying more for longer.
“They are doing all of this at a time when inflation is high and interest and mortgage rates are already on the rise.”
