That could cost £10bn ($17bn) a month in the first six months, on top of already announced energy bailouts by Truss, which Kwarteng confirmed on Friday.
He did not mention energy bill relief spending or further estimated costs of the government’s large tax cuts, but defended the UK’s debt level as the second lowest debt-to-GDP ratio in the G7.
The UK’s total debt as a percentage of GDP is now down 99.6% from 103.8% two years ago, when the first pandemic-induced lockdowns culminated.
He warned that those on benefits should increase their attempts to find work or risk their funding being cut. In an attempt to stop the strikes that have paralyzed the service, he issued a warning against the laws against strikes and enacted laws against strikes. The bill puts paid offers on the ballot of members and enforces a required minimum level of service in the event of a labor dispute.
He said the goal is to achieve 2.5% economic growth.
“We are at the beginning of a new era,” he said in the House of Commons.
“Taxation is not just about raising public service revenues, but it is very important.
“We are positioning ourselves in a highly competitive global economy with lower corporate and personal tax rates,” he said.
“In time, we will publish a medium-term fiscal plan to more fully demonstrate our responsible fiscal approach, including how to reduce our debt as a percentage of GDP in the medium term,” he added.
Labor opposition said the plan was a discredited trickle-down economy.
Paul Johnson of the prestigious independent Institute for Fiscal Affairs said the government had announced the biggest package of tax cuts in 50 years, but that “there wasn’t even the sort of effort to add up public finance figures.” Told.
He said the obvious risk to government spending is inflation, now at 9.8%, and a further deterioration in government finances.
“This is a huge economic experiment with a lot of risks, and I hope it’s a potential upside for economic growth,” Johnson said.
Mr Johnson said the spending was at odds with recent Bank of England interest rate hikes aimed at curbing inflation.
Markets reacted badly to the fastest rise in government borrowing rates in 30 years, with the pound falling to a 37-year low of $1.10 against the dollar.
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Liz Truss makes a spectacular tax cut gamble as the pound plummets
Source link Liz Truss makes a spectacular tax cut gamble as the pound plummets