Mini-budget cutting tax for millions to be announced next week as Kwarteng mulls binning bankers' bonus cap
15 September 2022, 13:34 | Updated: 15 September 2022, 13:47
A mini-budget bringing in tax cuts for millions will be given by Kwasi Kwarteng next week.
The new Chancellor is expected to confirm that the National Insurance hike will be reversed.
That move has been criticised for saving top earners some £1,800, while those on the lowest incomes would get about £7 back a year.
However, The Guardian said senior MPs believe Mr Kwarteng could make a "rabbit out of the hat" announcement on September 23, possibly cutting income tax by 1% a year ahead of his predecessor Rishi Sunak's bid to do it in 2024.
The Prime Minister has already said she wants to stop the corporation tax rise planned by the Johnson government, and her people have spoken to industry about changing business rates and cutting VAT.
Sources have also said Mr Kwarteng is considering getting rid of the cap of bankers' bonuses, with City bosses complaining about EU-wide rules limiting them to twice an employee's salary.
They say that leads to higher base pay, pushing up costs for companies, and that it makes the UK a less attractive business destination.
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Labour leader Sir Keir Starmer said he was plotting "pay rises for City bankers, pay cuts for district nurses".
Luke Hildyard, the executive director of the High Pay Centre think tank, said: "The bonus cap has probably helped to contain bankers' pay awards but they've still reached record highs this year while the rest of the country has undergone an epic cost-of-living crisis and profound economic hardship.
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"We know that bonuses in the financial services sector have helped the richest 1% of the population to capture an increasing share of total UK incomes.
"Removing the cap would be a pro-rich ideological measure that sends a depressing message about who policymakers listen to and think about when making economic policy."
