Labour leaders in Greater Manchester have been reacting with anger to the mini-budget announced by the government this morning. Kwasi Kwarteng lifted the cap on bankers bonuses and scrapped the highest tax rate for those earning £150k a year, as well as a raft of other tax cuts, in a controversial budget today.
From April, the 660,000 earners getting more than £150,000 a year will no longer pay the top income tax rate of 45% and will instead pay the 40% applicable to those on more than £50,271 - meaning they will each reportedly save on average around £10,000 in tax a year.
Using more than £70 billion of increased borrowing, Mr Kwarteng also brought forward a planned cut to the basic rate of income tax to 19p in the pound a year early to April and reduced stamp duty for homebuyers. He argued tax cuts are “central to solving the riddle of growth” as he also added restrictions to the welfare system.
READ MORE: Eight key announcements Kwasi Kwarteng made in today's mini-budget
Treasury estimates put the measures, including Liz Truss’s promises to reverse the national insurance rise and axe the hike to corporation tax, as costing nearly £45 billion a year by 2026.
Mr Kwarteng claimed his economic vision will “turn the vicious cycle of stagnation into a virtuous cycle of growth”. But Labour leaders across the region have heavily criticised these tax cuts, saying they will benefit the richest in society and are unlikely to create the growth that the government says it will.
The night-time economy adviser for Greater Manchester, Sacha Lord, has been particularly critical of the package's lack of support for hospitality. He tweeted: "Speechless. No VAT or Biz Rate support for Hospitality. Corporation tax cuts are completely useless if businesses aren’t turning a profit, or worse, closed. These announcements will now mean last orders for thousands of Hospitality businesses meaning mass redundancies.
"I'm absolutely clear. This Gov't is just about big business, corporations and the fat cats. They have just sent a strong message to the Hospitality industry: They don't care. They have just thrown small family run businesses to the wolves."
Lisa Nandy, Labour MP for Wigan and shadow secretary for Levelling Up, Housing and Communities, described the announcement as a transfer of wealth from the north and midland to London. She said: "This is genuinely extraordinary.
"The thing this country can now least afford is a Tory Government. The tax cut for the wealthiest costs £2.3bn this year. That’s more than the entire Levelling Up Fund given out so far.
"It totally sums up this government. More money for millionaires than for the North.
"This mini-budget is a massive transfer of money from working families to the richest. But two-thirds of the highest earners who’ve just had their taxes cut live in London and the South East. So it’s also a massive transfer of wealth from the North and Midlands to the capital."
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Andrew Gwynne, MP for Denton and Reddish, added: "So the last 12 Tory years were a mistake? For once I agree with them."
Not all of Greater Manchester MP's, including the Conservatives or Mayor Andy Burnham, had published their thoughts on the mini-budget at the time of writing.
But the leader of Manchester City Council, Bev Craig, simply described it as "The Bankers Budget".
And the Shadow Secretary of State for Business and Industrial Strategy and MP for Stalybridge and Hyde, Jonathan Reynolds, said: "If the Conservatives knew how to get the economy working, they would have done so by now. The scale of Conservative recklessness today is unprecedented. It is no wonder they didn’t allow independent forecasts."
Jim McMahon, MP for Oldham West and Royton, added: "That budget statement was political and economic madness. I fear for what’s coming for working people. There is more than a bad smell to this rush to frack against local community wishes and explicitly now scrapping environmental protections."
The Chancellor began his speech by insisting “help is coming” for people with their energy bills. He said the energy price guarantee will limit the unit price that consumers pay for electricity and gas, saying it equalled to "cutting everyone’s energy bills by an expected £1,400 this year".
However, a Greater Manchester poverty group says this morning's announcement 'fails' those with the lowest incomes. The Chancellor brought no news of extra targeted support for the poorest families who are “desperately struggling” with the cost-of-living crisis.
At least £1,200 for eight million of the most vulnerable households has previously been announced by the Government, but charities say they need more support to get through the winter.
Greater Manchester Poverty Action’s CEO Graham Whitham has commented, “Today’s mini-budget should have seen the government finally take steps to provide additional targeted support to low-income households. Instead, they have prioritised those on the highest incomes through tax cuts, whilst pledging a more punitive benefits system for the most vulnerable.
"The measures announced fail low-income households who need urgent help now. A vicious cycle of being forced into debt and making impossible choices due to soaring bills will intensify. The lack of support will push many Greater Manchester residents who are already finding it hard to make ends meet deeper into poverty.
"There has been a poverty crisis for years, the cost-of-living crisis is worsening existing inequalities. Whilst local councils in Greater Manchester are doing all they can to support residents, the drivers of change lie with central government. For long-term change, the government need to develop a national plan to end poverty."
And The Child Poverty Action Group (CPAG) said the announcement was “more about bankers’ bonuses than helping hungry kids”.
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