Chancellor of the Exchequer Kwasi Kwarteng has announced that the new government will cut Stamp Duty, meaning that around 200,000 people will avoid paying it at all.
The cut applies in England and Northern Ireland and will raise the threshold in property price at which Stamp Duty tax is paid to £250,000.
Currently, the threshold for which first-time buyers pay Stamp Duty is £300,000 – that will now be raised to £425,000.
Kwarteng said: "We’re going to increase the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000.
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“The steps we’ve taken today mean 200,000 more people will be taken out of paying stamp duty altogether.
“This is a permanent cut to stamp duty, effective from today."
The Chancellor was jeered from the opposition benches as he declared the new government as ‘a new era’, but his first mini-budget seems set to reinforce the pledge of the new Prime Minister to stimulate economic growth through cutting taxes.
Whilst that strategy does have some supporters, many critics say that it fails to benefit those on the lowest incomes, whilst handing money over to the already wealthy.
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Speaking of which, Kwarteng went on to announce that the cap on bonuses that can be received by bankers is to be scrapped.
He began by further outlining the government’s plan to mitigate against soaring energy bills from October 1, stating that the government’s plan to implement an energy price guarantee at £2,500 – still a marked rise – will cost £60 billion in the six months from October.
However, he told MPs that this cap will save households up to £1,400, whilst those on the lowest incomes will also receive additional support through payments.
Further to that, he announced that the increase in Corporation Tax proposed by the previous government under Chancellor Rishi Sunak would be called off, meaning that the current rate of 19 percent will remain.
As well as that, Kwarteng announced that the 45 percent higher income tax will be ‘abolished’ and that the basic rate of income tax will be reduced to 19p out of the pound.
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The budget was roundly criticised by Labour’s Shadow Chancellor Rachel Reeves.
She accused Kwarteng of a ‘comprehensive demolition’ of the last 12 years of Tory government.
She said: "The costs of the energy price cap will be funded by borrowing, leaving eye watering windfall profits of the energy giant untaxed,"
Reeves went on to claim that ‘working people are left to pick up the bill”.
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She continued: "Borrowing higher than it needs to be, just as interest rates rise.
“And yet the chancellor refuses to allow independent economic forecasts to be published, which would show the impact of this borrowing on our public finances, on growth, and on inflation.
“It is a budget without figures, a menu without prices.
"What has the chancellor got to hide?"
Tom Wood