What to expect from today's mini-budget

Chancellor of the Exchequer Kwasi Kwarteng arrives at 10 Downing Street, London. Picture date: Thursday September 22, 2022.
Chancellor of the Exchequer Kwasi Kwarteng arrives at 10 Downing Street, London. Picture date: Thursday September 22, 2022.

The Government is expected to unveil an ambitious plan of tax cuts to encourage growth

Chancellor Kwasi Kwarteng is preparing for his first address to MPs this morning where he's expected to lay out a mini-budget of £50bn worth of tax cuts, designed to promote economic growth.

When is the mini-budget?

The Chancellor will announce the mini-budget at 9.30am - unlike a full budget the chancellor will put forward a few proposals, mainly focused on tax cuts for households and businesses.

What is it likely to include?

Prime Minister Liz Truss has promised tax-cuts to boost the economy including:

  • Cancelling the planned increase to corporation tax. The former chancellor had planned the raise from 19% to 25% from next April - but the Government believe reversing the policy will make Britain more appealing to business.
  • Cut in stamp duty in order to encourage people to move, and allow first time buyers to get on the property ladder.
  • We're also expecting more policies to help parts of the UK to become 'investment zones' with lower taxation and planning rules.
  • The chancellor is also said to be considering scrapping the cap on the bankers' bonuses - something that was introduced by EU law in 2014.
  • As reported yesterday there is also some suggestion that there will be changes to the welfare system- including overhauling the terms of universal credit to bring more people into the work force.

What has already been announced?

  • The scrapping of a 1.25 percentage-point rise in national insurance contributions (NICs) to fund the health and social care levy. The change comes in force on November 6.
  • Truss announced a £100bn energy cap to help households with the cost of energy bills. The energy cap freezes energy bills at around £2,500 for two years, and the temporary removal of green levies.
  • An energy relief scheme to protect businesses, charities and public sector organisations such as schools and hospitals from rising energy bills this winter. The energy bill relief scheme will provide a discount on wholesale gas and electricity prices for six months from October 1 to March 31.

What won’t it include?

  • The Treasury’s estimated costs for the price cap and tax cuts will not have been independently verified by the Office for Budget Responsibility (OBR), the watchdog that is charged with assessing how government policy will affect the public finances.
  • The OBR is mandated to provide two forecasts a year and is likely to produce updated figures during the budget held in November. Kwarteng’s fiscal statement follows the example set by Sunak, who delivered a series of emergency fiscal interventions during the pandemic without the assessments of the OBR.