Angela Rayner hints Labor could RESCIND Kwarteng’s income tax cut to 19p if they win next election

Angela Rayner hints Labor could RESCIND Kwasi Kwarteng’s income tax cut from 20p to 19p if they win next general election

  • Deputy Labor leader tells Radio 4 that cutting income tax is ‘the wrong priority’
  • She swore her party would make ‘those with the broadest shoulders’ pay
  • Rayner appeared on Today and BBC Breakfast on a busy broadcast day
  • It came after Kwarteng’s £45billion ‘mini budget’ of tax cuts and new borrowing
  • Markets were sent into a spiral as the pound slumped to a 37-year low against the dollar

Labor’s deputy leader has suggested the party could reverse the 1p income tax cut announced by Chancellor Kwasi Kwarteng if it wins the next general election.

Angela Rayner said the new general income tax rate of 19p, down from 20p, was “the wrong priority”.

During an appearance on Radio 4’s Today, he was asked: ‘Would you reverse the income tax cut?’

The deputy leader replied, “Well, we said that, you know, cutting income tax is the wrong priority. So yeah, we don’t think that’s the priority.

Young Chancellor Kwarteng announced the £45billion ‘mini budget’ in the Commons yesterday

“We will present our tax proposals, which will ensure that the lowest wages [see] their cost of living is improving.

New Chancellor Kwarteng has denied ‘gaming’ the economy by revealing £45billion in tax cuts and around £400billion in borrowing over the next five years.

He admitted the UK was most likely already in recession, after the Bank of England measured two consecutive quarters of negative economic growth.

Chief Treasury Secretary Chris Philp, however, insisted that cutting taxes would boost growth.

He told Times Radio: ‘We’re going to do what’s right. We will generate growth.

“And we’re not going to worry about the politics of envy, or its optics.”

Angela Rayner told BBC Breakfast this morning that the new income tax rate of 19 pence was

Angela Rayner told BBC Breakfast this morning that the new 19p income tax rate was ‘the wrong priority’, suggesting Labor would reverse the cut if they win the next election.

Mr Kwarteng's plans are thought to cost £400billion in new borrowing over the next five years

Mr Kwarteng’s plans are thought to cost £400billion in new borrowing over the next five years

The IFS said the tax cuts were the biggest since Anthony Barber’s budget in 1972, when he and Ted Heath tried to generate a pre-election boom.

In short: what did the Chancellor announce?

Abolition of the 45p tax rate, paid by those earning over £150,000, from April next year

Cost per year: £2,000,000,000

1 pence cut in basic income tax rate delayed for one year to April 2023

Cost per year: £5 billion

No stamp duty payable on property purchases up to £250,000 and up to £425,000 for first-time buyers

Cost per year: £1.5 billion

Reintroduction of VAT-free purchases for foreign tourists

Cost per year: £2,000,000,000

Hike in National Insurance contributions canceled from November 6

Cost per year: £15 billion

Cancellation of the planned increase in corporation tax next year so that the levy remains at 19%

Cost per year: £18 billion

Companies based in 38 new ‘investment zones’ will see their taxes reduced and benefit from the removal of planning rules

Cost per year: Not specified

Removed cap on banker bonuses to energize the City

Cost per year: None

Bullish Kwarteng insisted it was a “good day for the UK” thanks to the new administration’s flagship proposals to boost growth.

Kwarteng also said his measures were “fair” because they “reduce taxes across the entire income bracket”.

Markets have so far been unconvinced by the government’s announced growth plan, with the pound slipping to its lowest level in 37 years against the dollar.

The British pound fell 3.6% yesterday below $1.09.

The Chancellor has abolished the maximum rate of 45p for around 660,000 people earning over £150,000, saving them an average of £10,000 a year each.

Labor has said it will unveil its own tax and spending proposals next week.

Rayner also criticized the government’s ‘casino economy’ in an interview on BBC Breakfast this morning.

Describing Mr Kwarteng’s flagship tax policies as “really scary”, she said: “There have been attacks on workers’ rights, attacks on people trying to cope with the cost of living crisis, and at the same time allowing banker bonuses to be uncapped.’

Rayner also told Today: ‘Our tax rates were reasonably low anyway, especially on business tax.

“It’s short-termism. Even government announcements [on energy bills] are six months. This is a very dangerous bet on our economy […] for future generations.’

Britain has not seen “sustainable growth” over the past decade, Rayner added.

Philp also told Sky News this morning: ‘Let’s be clear, the interest rates payable on government gilts are about the same in the UK today as they are in the US.’

“You mention the dollar, which has been strong against a number of currencies, including the yen and the euro.”

The Resolution Foundation has estimated Kwarteng’s plans will cost an additional £400bn in borrowing over the next five years.

Rayner said Labour's own tax proposals

Rayner said Labour’s own tax proposals ‘will secure improvements in the cost of living’ for those on the lowest wages – and called the government’s growth plan a ‘casino economy’.

Why Millions Still Face Bigger Tax Bills

Despite yesterday’s budget cuts, millions of pensioners and middle-income people under pressure are still facing higher tax bills after the new Chancellor failed to reverse the freeze on tax thresholds on Income.

It comes after experts warned that only those paid over £155,000 will really benefit from yesterday’s mini budget.

Former Chancellor Rishi Sunak announced last year that personal income tax thresholds would be frozen until 2026. The sneaky tax grab, dubbed a “fiscal drag” by economists, means the Treasury pockets more as wages rise, as more workers are attracted to higher incomes. brackets.

Dubbed a stealth tax raid, the move was heavily criticized as a real pay cut for millions of people already affected by the cost of living crisis. So while the government has now pledged to scrap the National Insurance hike and cut the basic rate of income tax by 1 pence, any savings could be wiped out.

Some 4.3million people were paying the top income tax rate of 40p or 45p when Boris Johnson won the election in 2019. That figure is expected to hit a record 6.1million this year, almost double the number of 2010, according to figures by pension. LCP consulting firm.

Laura Suter, head of personal finance at AJ Bell, said: ‘Previously announced plans to freeze income tax brackets at a time when we are seeing rampant inflation and decent wage growth mean that many people will eventually be faced with paying more taxes. This is not quite the gift the government proclaims for the average worker, as many people will still find themselves pushed into the highest tax brackets.

LCP also warned this week that more than half a million people over the age of 65 could be forced to pay income tax for the first time next year if the state pension increases by about 10% as expected. This is on top of the additional 1.2 million retirees who have been lured into the income tax net since 2019.

Paul Johnson, from the Institute for Fiscal Studies, said only those with incomes over £155,000 would benefit. He added that the tenth richest household, which was expected to lose £3,500 a year by 2025-26 under previous plans, will now earn around £700 a year.

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