Government 'mini-budget' branded a 'circus of the fiscally negligent' as pound sinks to 37-year low and cap lifted on bankers’ bonuses

The pound plummeted after Chancellor Kwasi Kwarteng announced the biggest raft of tax cuts for half a century, in a “gamble” to raise falling living standards by boosting growth.

In a speech this morning (Friday, September 23) Mr Kwarteng set out plans for extra borrowing worth more than £70 billion, cuts to income tax and stamp duty and new rules to make it harder for trade unions to call strikes.

Prime Minister Liz Truss's new spending chief told Parliament tax cuts would be “central to solving the riddle of growth”, as he also confirmed plans to axe the cap on bankers’ bonuses and tighten benefits rules.

But the proposals saw the pound dive to a 37-year low and prompted stinging criticism from opponents.

Chancellor Kwasi Kwarteng delivered his "mini-budget" to the House of Commons, prompting a slump in the value of the pound. (Jessica Taylor/UK Parliament via AP)

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Washington and Sunderland West MP Sharon Hodgson branded the spending plans a “circus of the fiscally negligent”.

She added: “As families and businesses fear for their futures, today the Government offer a series of benefits for the very richest in society.

“The Chancellor called this a tax cut for millions.

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Sharon Hodgson, MP for Washington and Sunderland West.

"He’s wrong - this is a tax cut for millionaires.”

Ministers have already confirmed measures to help households and businesses cope with rising energy bills, which the new budget has estimated will cost about £60 billion over the first six months from October.

Changes to benefits rules will mean Universal Credit claimants will be forced to show they are actively looking for more and better-paid work, or face having their benefits reduced.

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A planned alcohol duty hike on beer, cider, wine and spirits has also been cancelled, at a predicted cost to the treasury of £600 million.

Easington MP Grahame Morris

Easington MP Grahame Morris called it the “bankers' budget”.

“The question you must ask is who gains and who pays,” he added.

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“If you earn over £150,000, work in the banking sector, you have gained – the banking bonus cap is abolished, the top rate of tax is abolished, and you will gain more from the national insurance cut.

“If you are part of the 99%, your energy bills will be doubled compared to a year ago, and you will have to pay back a national energy debt in excess of £100 billion for the next two decades to protect the profits of energy generators.

“Decades after Liz Truss leaves office, we will still be paying for the disastrous decisions made today.”

The spending plans were announced a day after the Bank of England warned the UK may already be in a recession and lifted interest rates to 2.25%.

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Paul Johnson, the director of the Institute for Fiscal Studies economic think tank, said Mr Kwarteng’s “big gamble” was the “biggest tax-cutting event since 1972” and predicted further interest rate rises.

The Joseph Rowntree Foundation, an anti-poverty campaigner, said it shows the Government has “no understanding of the economic reality facing millions across the UK”, a sentiment echoed by the North East Child Poverty Commission.

Anna Turley, the commission’s chairman, said: “Families in the North East already struggling to keep their heads above water – in and out of work – heard nothing about how the Government intends to protect them from severe hardship in the coming months.

‘The disconnect between the announcements made today and the reality of rising child poverty in every part our region, is absolutely astonishing.”