Skip to content
Search

Latest Stories

UK's Kwarteng to scrap top rate of income tax, cut basic rate from April

Kwarteng said from April 2023 Britain would have a single higher rate of income tax of 40 per cent.

UK's Kwarteng to scrap top rate of income tax, cut basic rate from April

Britain's new finance minister Kwasi Kwarteng said on Friday he would scrap the country's top rate of income tax and cut the basic rate next April - a year earlier than expected - to spur economic growth.

Kwarteng said from April 2023 Britain would have a single higher rate of income tax of 40 per cent, scrapping an additional rate of 45 per cent on income over £150,000 ($168,000).


He also said he would cut the basic rate of income tax to 19 pence in April 2023, one year earlier than expected.

"That means a tax cut for over 31 million people in just a few months' time," he told parliament. "That means we will have one of the most competitive and pro-growth income tax systems in the world."

Investors unloaded short-dated British government bonds as fast as they could, with the cost of borrowing over 5 years seeing its biggest one-day rise since 1991, as Britain raised its debt issuance plans for the current financial year by £72.4 billion($81 billion). The pound slid below $1.11 for the first time in 37 years.

Kwarteng's announcement marked a step change in British economic policy, harking back to the Thatcherite and Reaganomics doctrines of the 1980s that critics have derided as a return to "trickle down" economics.

"Our plan is to expand the supply side of the economy through tax incentives and reform," Kwarteng said.

"That is how we will compete successfully with dynamic economies around the world. That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth."

A plan to subsidise energy bills will cost 60 billion pounds just for the next six months, Kwarteng said. The government has promised households support for two years as Europe wrestles with an energy crisis.

Tax cuts - including an immediate reduction in the Stamp Duty property purchase tax plus a reversal of a planned rise in corporation tax - would cost a further 45 billion pounds by 2026/27, he said.

The government said raising Britain's annual economic growth rate by 1 percentage point over five years - a feat most economists think unlikely - would increase tax receipts by around the same amount.

Britain also will accelerate moves to bolster the City of London's competitiveness as a global financial centre by scrapping the cap on banker bonuses ahead of an "ambitious deregulatory" package later in the year, Kwarteng said.

The opposition Labour Party said the plans were a "desperate gamble".

"Never has a government borrowed so much and explained so little... this is no way to build confidence, this is no way to build economic growth," said Labour's finance spokeswoman Rachel Reeves.

(Reuters)

More For You

Man found guilty of rape and murder of Irish backpacker in India

McLaughlin, 28, from County Donegal, was found dead in a field in Goa in March 2017. (Photo credit: Twitter)

Man found guilty of rape and murder of Irish backpacker in India

A COURT in India has found Vikat Bhagat guilty of the rape and murder of Irish backpacker Danielle McLaughlin.

McLaughlin, 28, from County Donegal, was found dead in a field in Goa in March 2017.

Keep ReadingShow less
Alderman Alastair King

King, who serves as the global ambassador for the City of London, will be in Mumbai to discuss trade and investment under his mayoral theme, 'Growth Unleashed.'

Lord Mayor of London to visit India for trade talks

THE LORD MAYOR of London, Alderman Alastair King, is set to visit India for a week starting Saturday, aiming to promote free trade and capital flows between the two countries.

King, who serves as the global ambassador for the City of London, will be in Mumbai to discuss trade and investment under his mayoral theme, “Growth Unleashed.”

Keep ReadingShow less
trump-modi-washington-getty

The meeting came hours after Trump criticised India’s business environment and announced plans for reciprocal tariffs on countries that impose duties on US imports. (Photo: Getty Images)

Modi and Trump agree to resolve trade disputes, discuss tariff concerns

INDIA and the US have agreed to begin negotiations aimed at resolving trade and tariff disputes, following talks between Indian prime minister Narendra Modi and US president Donald Trump in Washington.

India has committed to increasing purchases of US oil, gas, and defence equipment, while both sides pledged to address trade barriers.

Keep ReadingShow less
Pablo-Escobar-merchandise-Getty

Escobar, killed by security forces in 1993, remains a figure of global interest, with his image appearing on souvenirs like T-shirts, mugs, and keychains. (Photo: Getty Images)

Colombia considers ban on Pablo Escobar merchandise

COLOMBIA’s Congress is considering a bill that would ban the sale of merchandise featuring drug lord Pablo Escobar and other convicted criminals.

The proposed law aims to curb the glorification of Escobar, who was responsible for thousands of deaths during his time leading the Medellín cartel, reported BBC.

Keep ReadingShow less
Assisted dying bill: Judge approval scrapped for expert panel safeguard

Polls show most Britons back assisted dying, with supporters calling for the law to reflect public opinion.

Assisted dying bill: Judge approval scrapped for expert panel safeguard

Eastern Eye

THE proposed new assisted dying law for terminally ill people will be amended to remove the requirement that a high court judge sign off on each case, Labour MP Kim Leadbeater said on Tuesday (11).

Opponents of assisted dying said the change would weaken the safeguards around protecting vulnerable people from being coerced or pressured into taking their own lives.

Keep ReadingShow less