The UK’s biggest raft of tax cuts in decades is a “reckless and irresponsible” gamble, Labour MPs in the North East have warned.
Chancellor Kwasi Kwarteng unveiled huge plans on Friday to abolish the top rate of income tax for the highest earners, cut income tax and stamp duty, lift a cap on bankers’ bonuses, reverse a rise in National Insurance, and cancel a hike in corporation tax in a bid to drive growth. But Labour has claimed the measures, to be paid for by more than £70bn in borrowing, will reward the richest and amounted to “replacing levelling up with trickle down” while the nation is in the midst of a cost of living crisis.
Newcastle North MP Catherine McKinnell took aim at the new government’s proposals, which came in the week that it emerged that the child poverty gap between the North East and the rest of the UK has hit a 20-year high.
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She said: “Today saw reckless and irresponsible tax giveaways to the richest, whilst the Government rejected calls for a windfall tax on oil and gas giants seeing booming profits. The first few days of Liz Truss’ government show that it is completely out of touch from the reality facing hardworking taxpayers who will foot the bill for the energy crisis for years to come.
“The North East Child Poverty Commission highlighted this week that the child poverty gap between the North East and the rest of the country has reached a 20 year high. Yet when challenged, the Chancellor could not point to anything in the announcements today that will help end the scourge of rising child poverty in Newcastle and the North East.”
Newcastle Central MP Chi Onwurah called the Chancellor’s address a “budget for the rich, by the rich”, while North of Tyne mayor Jamie Driscoll said he would have more faith in the government's plans if Mr Kwarteng had "got on a plane to Las Vegas, went to a routlette wheel, and put £1bn on number 13".
The Northumbria Police and Crime Commissioner, Kim McGuinness, said: “We all know who the winners are; and it’s not ordinary working families in the North East. Those set to benefit from today’s plans aren’t those who are queuing up at our food banks. These plans do nothing for levelling up, in fact, will no doubt worsen inequality in our region.”
Two North East Tory MPs recently promoted into the Liz Truss government spoke out in support of the mini-budget. Bishop Auckland’s Dehenna Davison, now a minister in the levelling up department, hit back at critics by saying there was “nothing immoral about cutting taxes”.
She added: “The immoral thing would be allowing the country to slide into recession, putting jobs and livelihoods for the most vulnerable at risk.”
Berwick MP Anne-Marie Trevelyan, the new transport secretary, insisted the plans would “remove barriers for business and build the infrastructure we need to grow the British economy”.
She said: “This comes in addition to the energy support measures outlined to protect UK households, business, charities and public sector bodies from unaffordable energy bills. The planned £400 relief for each home is being kept, but wholesale gas and electricity prices are being capped and the typical household should not pay more than £2,500 per year. Those off grid homes will also receive extra support to reflect the rise in oil prices, and of course the measures already in place to help those on pensions or low incomes are still there.
“This plan is unapologetically ambitious, with an aim to achieve a trend growth rate of 2.5% for the UK economy; we’ve done it before, we can do it again.”
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