It's critical that the tax cutting growth plan from Truss and Kwarteng works, the future of our economy is at stake, says Dan Wootton
It’s a bonfire of the growth-destroying taxes – and I’m here for it
It’s a bonfire of the growth-destroying taxes – and I’m here for it.
The new Prime Minister Liz Truss has proven she will prioritise economic growth over anything else in her early days in Downing Street.
This is going to be a full throttled, full fat Conservative government when it comes to tax policy, not the diet version we’ve had become accustomed to.
Confirmation came this morning with this bombshell scoop on the front page of The Times, with Whitehall sources revealing that cuts to the dreaded stamp duty were the “rabbit out of the hat” in the emergency mini-budget to be delivered by the Chancellor Kwasi Kwarteng.
Now we don’t know the details yet, but I despise stamp duty and hope it will be cut altogether on houses up to £500,000, rather than up to £125,000 as it is at present.
As Robert Colville of the Centre for Policy Studies, points out it has long passed the point where it is “actively distorting the market” because it contributes to fewer sales happening.
The number of houses we build in this country has an incredibly close relationship to the number of times people buy and sell houses.
What this means is that if you can drive up transactions (by cutting transaction costs, ie stamp duty), you drive up housing supply.
The Institute for Fiscal Studies branded stamp duty a “bad, distortive tax”.
Of course, stamp duty is one of many cuts that will be unveiled, in addition to a halt to the corporation tax increase and a reversal of the National Insurance hike.
That puts Truss in a head-to-head with US president Joe Biden who, in a case of suspicious timing, wrote on Twitter in the hours before their New York meeting…
“I am sick and tired of trickle-down economics. It has never worked. We’re building an economy from the bottom out and middle up.”
I know whose strategy I’m backing!
Meanwhile, today the new business secretary Jacob Rees-Mogg unveiled the government’s massive package to cut energy bills for UK businesses, potentially saving the great British pub…
Of course, this package, which will be reviewed in six months, was necessary to protect small business, with many pubs and restaurants warning their bills were going to triple within a space of months, making it impossible to stay open.
But given the scale of this state intervention, it’s critical that the tax cutting growth plan from Truss and Kwarteng works.
The future of our economy is at stake.