UK Chancellor of the Exchequer Kwasi Kwarteng has said the UK will spend £60bn on subsidies for gas and electricity bills for businesses and households over the next six months. He will also cut taxes to boost the economy. This includes income tax and house purchase tax.
Kwarteng stressed in parliament that due to fluctuating energy prices, cost estimates of energy projects are still uncertain. “Based on recent prices, the total cost of the energy package for the six months to October will be around £60 billion,” he said. He expects costs to drop as contract negotiations with energy suppliers progress.
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Business tax
He added that the corporate tax hike will be waived in addition to other changes in the tax system. It would give the UK one of the most competitive and growth-oriented tax systems in the world, he said.
Prime Minister Liz Truss earlier announced a two-year freeze on energy prices. By doing so, she wants to prevent more households and businesses from being hit by rising prices. With this move, it wants to prevent or curb recession.
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Unlimited bank bonus
The minister also announced that the ban on bonus for bankers would be removed. Currently, British bankers are legally allowed to receive up to twice their annual salary as bonuses. This is a ban imposed by the European Union due to the 2008 financial crisis. According to Quarteng, this only had the effect of increasing salaries and causing banks to move their operations to other countries.
Prime Minister Truss has already promised to give London more freedom as a financial centre. This makes it easier for the British capital to compete with cities like New York, Singapore and Hong Kong. By raising the cap on bonuses, London should become more attractive to stock traders and top bankers.
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