The UK government will not worry about the “politics of envy” as it tries to spur economic growth with the biggest tax cuts in 50 years, a minister has said.
Prime Minister Liz Truss’s new government on Friday unveiled the biggest package of tax cuts in half a century, which will cost £45 billion ($49 billion) annually, aimed at spurring growth in the UK economy.
Using more than £70 billion ($76 billion) of increased borrowing, Chancellor Kwasi Kwarteng cancelled a planned increase of corporation tax, abolished the top rate of income tax for the highest earners, brought forward a planned cut to the basic rate of income tax, and reduced stamp duty for homebuyers.
The main opposition Labour Party said the tax cuts will only benefit the richest 1 percent and make the next generation worse off.
Labour leader Sir Keir Starmer wrote on Twitter: “Tory casino economics is gambling the mortgages and finances of every family in the country.”
Talking to supporters in Liverpool ahead of the party’s annual conference, he said the Conservative Party’s driving ideology is to “make the rich richer and do nothing for working people.”
Cutting Taxes ‘For Everybody’
Chris Philp, chief secretary to the Treasury, dismissed the criticism as “politics of envy.”He told Times Radio on Saturday: “We’re going to do what’s right for the whole country. That means reducing taxes for everybody, low earners but also high earners.
“We’re going to do what’s right, we’re going to get growth delivered. And we’re not going to worry about the politics of envy, or the optics of it.”
Philp also said the tax-slashing programme is “not a gamble, it’s a necessity.”
Controversial Plan
The tax-cutting programme has been welcomed by business leaders, with the Confederation of British Industry (CBI) calling it a “turning point for our economy.”The Adam Smith Institute, a free market think tank, said it is “incredibly encouraged to see so many pro-growth policies.” The Institute of Economic Affairs (IEA) also called it “refreshing” and a “very encouraging start.”
But the Institute for Fiscal Studies (IFS) economic think tank has expressed reservations.
IFS director Paul Johnson said: “The scale of these tax cuts, along with the slowing of the economy, means that unless something remarkable happens, we’re going to be on an unsustainable path in terms of borrowing and, at some point, we’re likely to have to have tax rises to offset some of these cuts, or some cuts in spending.”
