UK Government mini-buget ‘will just make the super-rich richer’ while everyone else gets poorer says Welsh MP

A Welsh MP has said that the UK Government’s mini-budget due to be unveiled tomorrow will just “make the super-rich richer” while everyone else gets poorer.

Chancellor Kwasi Kwarteng is due to scrap a planned increase in corporation tax and lifting a cap on bankers’ bonuses.

At the same time he will announce a clamp down on welfare, announcing that more than 100,000 people in part-time work could face a benefit cut if they fail to properly look for more work.

Ceredigion MP Ben Lake called on the Chancellor to “stop peddling fantasy ideas that have been completely discredited” and to focus on the immediate energy crisis.

The Plaid Cymru MP said: “Liz Truss and Kwasi Kwarteng seem intent on making the super-rich even richer while everyone else see the value of their wages decrease and costs rocket.

“The tax cuts to be announced tomorrow will hand a much greater proportion of income back to those who need it least – which is reprehensible in the current context.”

He called on the government to expand cost-of-living payments for vulnerable households, and increase payments for those reliant on heating oil for energy. He added that an urgent hardship fund is needed for businesses.

‘Unlock’

Ben Lake MP said that there was no evidence that tax cuts would bring economic growth.

“What is certain is that future generations will be paying off this Tory debt for decades to come,” he said.

“What we should be seeing tomorrow is a much clearer commitment to protecting households and businesses from the current crisis. This calls for expanding the cost-of-living payments and payments for those reliant on heating oil and guaranteeing that they will be extended next year.

“Furthermore, the Government should urgently establish a hardship fund for small businesses for whom the current support will be insufficient.

“It should also be recognised that decades of Westminster governments have underinvested in Wales.

“It is time to give Wales the fiscal powers we need to unlock our economic potential, starting with investment in our physical infrastructure and digital connectivity, a street-by-street home insulation programme and a renewables revolution.”

‘Win-win’

Among a range of measures set to be revealed by Kwasi Kwarteng tomorrow is a significant shake-up of the welfare system, with claimants working up to 15 hours a week on the National Living Wage required to meet regularly with a work coach and to take “active steps” to increase earnings.

If they fail to do so, under the plan, their benefits could be reduced.

Billed by the Treasury as a gradual expansion, the move will be an increase from the incoming 12-hour threshold for a more intensive work search regime and is expected to take effect from January as part of the Universal Credit system.

Mr Kwarteng has described the policy as a “win-win”, pitching it as a way to fill 1.2 million job vacancies across the country.

Under the changes, claimants aged over 50 will also get extra support from work coaches, while the newly unemployed will receive nine months of targeted sessions.

The Treasury believes that rising economic inactivity among the over-50s is contributing to a shortage in the jobs market, driving up inflation and limiting growth.

A return to pre-pandemic economic activity among over-50s, according to a Government estimate, could boost GDP by up to one percentage point.

“Our jobs market is remarkably resilient, but it is not perfect. While unemployment is at its lowest rate for nearly 50 years, the high number of vacancies that still exist and inactivity in the labour market is limiting economic growth,” Mr Kwarteng said.

“We must get Britain working again. These gradual changes focus on getting people back into work and maximising the hours people take on to help grow the economy and raise living standards for all.

“It’s a win-win.

“It boosts incomes for families and helps businesses get the domestic workers they need, all while supporting economic growth.”

‘Bumper’

As well as reversing the hike in national insurance contributions and scrapping a planned increase in corporation tax, which Prime Minister Liz Truss has promised, it has been reported that the Chancellor will cut stamp duty in a further attempt to drive growth.

Work and Pensions Secretary Chloe Smith said of the plan: “Whether it’s increasing their hours in their current role, entering a new sector or switching careers, we want people of all ages and all stages to be able to progress into fulfilling careers.

“The expertise our dedicated DWP work coaches bring will help to drive this change by removing barriers to progression and opening up opportunities for training and building skills, to increase earnings.”

Labour was quick to respond to the plan, with the shadow work and pensions secretary making reference to a reported Conservative plan to scrap the cap on bankers’ bonuses.

“So Tory ministers think reason we have over a million vacancies is because the low paid aren’t working hard enough and need to be threatened with sanctions but bankers needs bumper bonuses,” Jonathan Ashworth tweeted.

“We need a serious plan to support people to return to work and increase labour supply,” he said.