Criticism that rich to get richer in Felixstowe area after Tory's latest fiscal event
By Derek Davis
23rd Sep 2022 | Local News
Sweeping financial changes by the latest Conservative cabinet which will effect Felixstowe area businesses and residents has been met with a mixed reaction and dubbed "a plan to reward the already wealthy".
Chancellor Kwasi Kwarteng has outlined a series of tax cuts and economic measures in a massive shake-up of the UK's finances.
The basic rate of income tax has been cut to 19p and an increase in National Insurance has been reversed.
The threshold before stamp duty is paid in England and Northern Ireland has been raised to £250,000 - for first time buyers it's £425,000
In what is seen a nod towards increasing business confidence the cap on bankers' bonuses has been lifted, and a planned rise in corporation tax has been scrapped. The 45% top rate of tax for higher earners abolished - although this doesn't apply in Scotland.
In total there will be £45bn in tax cuts by 2027 but much of that - national insurance cuts, the abolition of the cap on bonuses and the highest rate of income tax - is channelled towards higher earners and has already brought some sweeping condemnation.
The BBC's Global trade correspondent Dharshini David said: "The richest 10 pert cent of society will gain 60 times as much from the National Insurance cuts as the poorest 10 per cent.
"It's a marked difference from the policy of recent years in which the government focussed more on redistributing income".
The Chancellor hailed his changes to national insurance, stamp duty and income tax as a "new era" - but Labour's Rachel Reeves called his fiscal event "a plan to reward the already wealthy".
A spokesman from Suffolk Chamber of Commerce said: ""This is a bold step forward in what nonetheless must be a sustained longer-term rolling programme of pro-business reforms by the Government in order to have the desired impact on growth and productivity.
"Suffolk Chamber's members will welcome both the reversal of the increase in employers' NI contributions and the scrapping of the planned increase in Corporation Tax. These policy shifts are big lobbying wins for this Chamber and indeed the whole chamber network.
"The reduction in the basic rate of Income Tax and the abolition of the 45% top rate should, hopefully, mean consumers have more money to spend, although inevitably some of this will be used to pay off existing debts.
"We have already backed the Energy Bill Relief Scheme announced earlier in the week to partially protect businesses from spiralling energy price rises. But as with the package of tax cuts, we need to see a longer-term package to secure national energy generation and supply.
"However, tax cuts in themselves are unlikely to transform our economy into one that is characterised by high skills, wages and productivity.
"We need a redoubled national programme of capital investment to achieve a generational shift in our core infrastructure: road, rail and mobile.
A purposeful programme of infrastructure upgrades will be like a magnet in drawing the skills base of Suffolk in an upwards direction, including through the Suffolk & Norfolk Local Skills Improvement Plan which is being run by Suffolk and Norfolk Chambers of Commerce."
Meanwhile, the Carers Trust CEO Kirsty McHugh believes the chancellor has issued an opportunity to provide a starter that will support the NHS, social care, and unpaid carers.
She said: "Millions of unpaid carers are being plunged into poverty, or facing extreme financial pressure, because of the extra costs of their caring role. Despite the critical role unpaid carers play in propping up a creaking health and social care system by caring for family members and friends, yet again they have been let down by the UK Government.
"The Energy Bill Relief Scheme will only be short-term support for the independent local carers charities in the Carers Trust Network who desperately need a decrease in energy bills, so that they can spend their funds to support unpaid carers in their communities.
"The cancelling of the Health and Social Care Levy is yet another blow – even though it was unclear when social care, and unpaid carers, would benefit from that Levy. There remains a gaping hole in the social care investment needed, leaving unpaid carers without the support they desperately need, like breaks.
"Where is the leadership on the issues facing unpaid carers?
"The announcements from the UK Government this week show there is still no real strategy that will support the NHS and social care, and unpaid carers and the services that help them."
- The basic rate of income tax will be cut by 1p to 19p from April 2023
- The 45p tax rate for top earners over £150,000 will be abolished, also from April next year
- First-time buyers will pay no stamp duty on homes worth £450,000, up from £300,000
- A 1.25% rise in National Insurance to be reversed from 6 November
- Cost of subsidising both domestic and business energy bills will cost £60bn for the next six months