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Torsten Bell

@TorstenBell

Sep 23

29 tweets
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Maxi-Budget coming in 3 minutes - it is going to have a lot in it so live tweeting of it may be more annoying than normal. You've been warned.

Energy bill support first - makes sense, it is the top immediate priority. Right to say the price cap will lower inflation by around 5% (we think a bit lower but roughly right)

Bank of England gets to be independent… in exchange for two meetings a week with chancellor

Chancellor notes growth hasn’t been good enough. Yep. Then says that’s about taxes rising. Nope.

Last year lower migration was the silver bullet for a high wage economy (remember?). Today it’s tax cuts.

Growth Plan - has loads of measures in it, but the best thing about it is that it’s very short (40 pages)

Chancellor: Will be fiscally sustainable! Just not going to tell you how today.

Costing of energy package was missing last week but now here - £60bn for first 6 months (half for business and half for households). Chancellor right that temporary borrowing for this sensible (even if could be lower)

NEW ERA. Hope everyone’s enjoying it. Unbounded. Immense. Global presence.

I am massively up for this agricultural productivity statement promised.

New Infrastructure Bill - promising to simplify decision making process. Await details.

Promising to release surplus public sector land - literally promised by every Chancellor since Gordon

Supply side reform it turns out means rail unions being required to deliver minimum service during strikes and forcing them to put pay offers to member ballots

Chancellor right to say UK does require a successful financial services sector - and that bonus cap is a bit silly

Investment zones. Basically a deal: if local areas sign up to lower planning rules (not clear what they have to sign up to) then the area will get bigger tax incentives than Freeports

Rebranded devolved administrations as the developed nations.

Here comes the tax bit. A massive bit.

Corporation Tax staying at 19p (so don’t need to cut bank levy as previously planned). Basic choice here is lower headline rates rather than narrowing base of CT to exclude more investments as @Rishi Sunak planned

Want tax simplification. So am abolishing the Office for Tax Simplification.

Repealing the rules that require employers to certify that contractors are genuinely self-employed - this is a VERY bad idea. Huge abuse was going on before and will now start again

Alcohol duty frozen next April rather than rising with inflation (slightly surprised he hasn’t done that for fuel and business rates too)

Not just the rise in National Insurance being cancelled (almost all of which goes to better off households) but also the rise in dividend taxes

Stamp duty - basically raising nil rate band by £125k to £250k. Reduces bills especially in south

Here comes the rabbit exiting the hat

Abolishing the top 45p rate of tax. I did not see a trickle down argument on such steroids

Summary: Chancellor has announced biggest tax cuts since the 1970s, at price of public finances being set on an unsustainable footing. Gambles on growth, which is in Putin’s hands rather than ours in the short term

It's hard not to be awed by the scale of what has been announced today: - huge tax cuts - totally rejecting not just Treasury orthodoxy but Boris Johnson too

Political choice being made here is huge - hope Tory MPs have noticed: - not just full throated trickle down - not just throwing fiscal sustainability out window - but also leaving little wriggle room on public spending to make problems go away pre-election

You want to read the growth (or taxes down, borrowing up) plan? Now out 👇gov.uk/government/pub…

Torsten Bell

@TorstenBell

Chief Executive, @resfoundation

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