Chancellor Kwasi Kwarteng has today unveiled the Government’s growth plan for the UK economy, featuring tax cuts, planning reforms and a boost for the housing market.
In order to “get the housing market moving” the stamp duty threshold will increase from £125,000 to £250,000, with first time buyers not paying stamp duty on properties with the value of up to £425,000.
Signalling a new direction, in contrast to Boris Johnson’s policies, rises in corporation tax and National Insurance payments have been cancelled. The basic rate of Income tax will be cut to 19% from April 2023 and the 45p additional rate of income tax, paid by the richest 1% of the country’s population, will be reduced to 40p per pound.
Mr Kwarteng has also promised to boost the development of infrastructure projects by streamlining the associated planning process for areas including oil and gas, transport, nuclear, CCS and hydrogen. In a surprising turn of events, these planning reforms will also be applied to onshore wind projects, to help “unlock the potential of onshore wind by bringing consenting in line with other infrastructure”.
While clean energy and the Net Zero transition didn’t feature a lot in Mr Kwarteng’s speech, the Chancellor did point to renewables and other low carbon energy sources such as nuclear and hydrogen as “crucial to boosting domestic energy security and delivering on climate goals”. The plans also included measures to improve energy efficiency – a subject largely overlooked in the Energy Security Strategy released by Boris Johnson’s government earlier this year and most of the announcements since – stating that there will be new obligations placed on energy suppliers to help “hundreds of thousands” of customers to reduce their energy bills, and that there will be up to £2.1 billion spent over the next few years on adding energy efficiency measures and renewable heating systems to public sector buildings.
The Chancellor of the Exchequer, Kwasi Kwarteng, said:
“Economic growth isn’t some academic term with no connection to the real world. It means more jobs, higher pay and more money to fund public services, like schools and the NHS.
“This will not happen overnight but the tax cuts and reforms I’ve announced today – the biggest package in generations – send a clear signal that growth is our priority.
“Cuts to stamp duty will get the housing market moving and support first-time buyers to put down roots. New Investment Zones will bring business investment and release land for new homes in communities across the country. And we’re accelerating new road, rail and energy projects by removing restrictions that have slowed down progress for too long.
“We want businesses to invest in the UK, we want the brightest and the best to work here and we want better living standards for everyone.”
The Department for Business, Energy and Industrial Strategy (BEIS) has today also announced a £49.4m fund to help heavy industrial firms, involved in areas such as steel, pharmaceuticals and food production, transition from the use of fossil fuels to greener alternatives and reduce energy costs.
The full Growth Plan document is available to read here.