Martin Lewis fears a “stunning” budget with massive borrowing and tax cuts

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Money saving expert Martin Lewis has described the government’s new financial plan as “stunning” according to the chancellor Kwasi Kwarteng unveiled a mini-budget filled with sweeping tax cuts.

The chancellor insisted on Friday morning that “help is coming” for those struggling to pay energy bills but also abolished the highest rate income tax for the highest earners in Great Britain.

He also revealed that the government’s energy bill support package could cost £60bn in the first six months from October.

Mr Lewis, founder of Money Saving Expert, tweeted in response to the mini-budget: “This was a truly stunning statement from the Conservative Party Government. Massive new borrowing at the same time as tax cuts.

“Everything is aimed at the growth of the economy. I really hope it works. I’m really worried about what happens if it does.”

Regarding the top rate cuts, Mr Lewis explained: “From next April, the 45% top rate (applicable to those earning £150,000) will be abolished. So the top rate will be 40 percent higher than the rate threshold.

“This means mega earners pay the same as those on £50,000.”

Mr Kwarteng said tax cuts were “central to solving the growth puzzle” amid the current cost of living crisis.

The Treasury estimates that the tax cuts, including Liz Truss’ promises to reduce the rise in national insurance and corporation tax, will cost almost £45 billion a year in 2026.

Other announcements include stamp duty cuts, meaning 200,000 less people will pay tax on house purchases, VAT-free shopping for overseas visitors, legal restrictions on trade unions on strikes and plans to get more people on Universal Credit actively looking for work or face a reduction in benefits.

Mr Kwarteng said his economic vision would “turn the vicious cycle of stagnation into a virtuous cycle of growth”.

But shadow chancellor Rachel Reeves said the plan was “an admission of 12 years of economic failure” under Conservative governments.

“Never before has a government spent so much and explained so little,” she said.

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