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Everything you need to know about Kwasi Kwarteng’s mini-budget 2022

Here's how the government are looking to combat the cost of living crisis.

Danny Jones Danny Jones - 23rd September 2022

The Chancellor of the Exchequer, Kwasi Kwarteng, has delivered his 2022 mini-budget in an attempt to address concerns surrounding the ongoing cost of living crisis.

While significant tax cuts were already predicted ahead of the crucial economic update, many people across the country may have been surprised by the sheer extent of measures announced by the chancellor across the board.

Energy

Addressing the subjects on everyone’s mind early on, Kwarteng stated that the annual price of energy for UK households will now be limited to £2,500, resulting in savings of around £1,000 against the projected figures following the most recent energy cap.

He also confirmed that the £400 energy discount is still in place, with the most vulnerable homes receiving even more in government support. Some are less than convinced that any real ‘savings’ will be made.

Earlier this week, the government announced that they would be halving energy bills for businesses over the next six months. Today he confirmed that a relief scheme will be put in place, as well as an “energy market finance scheme” which will offer liquidity to traders.

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Similar relief will be afforded to schools and charities.

Lending and inflation

The hope is that this overall energy plan will reduce inflation, which currently sits at 9.9% based on August’s figures, to 5% and see the trending rate of annual financial growth to 2.5%.

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Not only does the government believes this will lower the wider cost of living pressures but also free up finances to help better fund public services.

The overall energy relief package is said to be costing approximately £60 billion, meaning a significant amount will have to be borrowed from the Bank of England.

Bankers’ bonuses cap and corporation tax hike scrapped

On the subject of banks, one of the most controversial parts of the Kwasi Kwarteng’s update was the announcement that the cap on bankers’ bonuses will be scrapped entirely, arguing that previous measures only led to higher wages and people paying tax in other countries outside of the UK.

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Next year’s scheduled corporation tax increase from 19% to 25% is also going to be scrapped, the rationale being that “low tax encourages investment” both domestically and from overseas.

Once again, people are less than impressed that the nation’s highest-earners appear to be the ones benefiting the most from government policy.

Removing red tape

The chancellor also said that the government are committed to removing further enterprise barriers caused by EU regulation, hoping to streamline “planning restrictions” across childcare, immigration, agricultural productivity, and digital infrastructure.

He sighted energy, telecoms and travel as key problem areas hamstrung by red tape.

However, he conversely criticised the ongoing strike action across the country and said that they plan to imitate other countries by introducing legislation to ensure minimum level service resumes.

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Tax cuts

Elsewhere, businesses in nearly 40 different ‘designated zones’ have been promised tax cuts for the next 10 years and no stamp duty on new premises. Speaking of which, as of today, no payment will be required on the first £250,000 of a property’s value, with first-time buyers paying zero on the first £425,000.

In fact, it looks as though the overall tax system is set to be reviewed once again. Not only are previous corporation tax and stamp duty plans being scrapped but income tax, alcohol duty and more are all being reexamined as part of the not-so mini-budget.

Alcohol duty is set to be frozen in February, meaning that Brits can expect to save around 7p per pint, 38p per bottle of wine and £1.35 on spirits. VAT-free shopping is also due to be introduced for overseas visitors, with aim of increasing revenue from tourism.

Kwarteng also confirmed that the basic rate of income tax will be cut by 1p to 19p from April 2023, with the 45p tax rate for those earning over £150,000 will be abolished from the same time next year.

This is said to be the biggest series of tax cuts in 50 years.

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A wary winter

Despite the ‘real’ living wage being increased by 10% in an attempt to try and curb rising costs in almost every other walk of life, it goes without saying that the UK faces an extremely difficult period ahead as energy costs continue to rise, post-Brexit prices keep rising and we approach the ever expensive winter months.

The shadow chancellor Rachel Reeves told the Financial Times that regardless of the measures announced today, both the mini-budget and Liz Truss’ appointment as Prime Minister represents “another zigzag on a path of policy failure” rather than any real sign of change.

Featured Image – Flickr @ Policy Exchange

News

A local baby bank is holding a vital fundraiser to stop it from closing for good

Danny Jones Danny Jones Save Our Baby Bank Trafford Greater Manchester fundraiser

A Greater Manchester baby bank is holding a vital fundraiser in hopes of preventing it from closing for good imminently.

For anyone unaware, baby banks are crucial organisations run largely by volunteers who help provide supplies to families in local communities, with more than 300 in use across the UK at present.

Through delivering much-needed aid such as clothing, prams, nappies and baby food, right through to direct financial support, they help keep parents and their children in good supply of essentials and much more – hugely important work at any rate, let alone during the winter and a cost of living crisis.

However, the Little Green Sock Project over in Trafford is at risk of permanent closure and was initially given until the new year to raise £200,000.

As seen in this moving video, the baby bank based over in Stretford Mall is in dire need of support and, crucially, the funds for a new premises.

They’ve been deeply moved by how Greater Manchester united in reaching into their pockets and sparing whatever they can to contribute to their fundraising target thus far – and they really are nearly at the finish line, which would mean safety for the genuinely life-saving service.

Fundamentally operated as a non-profit and volunteer-led charity, they naturally don’t have the means to just take over a new space on their own and with the current site set to be demolished very soon, a minimum of £200k is needed to find and fund a new location.

Having amassed over 90% of the amount needed, they’ve already bought themselves extra time, they just need one last push from us.

Urging people to donate what they can and share their fundraiser where possible, as well as welcoming corporate sponsorships should other local businesses wish to back them or get stuck through volunteering days, time is of the essence.

The Little Green Sock Project was only started back in 2022 and has already supported over 1,300 children, redistributing more than £240,000 worth of essential items like clothing, cots, prams, and stair gates to local families, as well as saving 20 tonnes of items from landfills.

It’s no exaggeration to say that they’ve changed and saved lives, both parents and children, and with the often difficult festive period approaching, their work is needed now more than ever.

There are just under a dozen baby banks in all of Greater Manchester, many of which are facing similar pressures. (Credit: Supplied)

Speaking on their efforts and the fundraiser, founder Catherine D’Albertanson said: “We believe that essentials needed for the health and wellbeing of children should not only be for those that can afford them. Our work ensures that no child in our community goes without essentials, but without new premises, we will have no choice but to close.”

Moreover, Little Green Sock Project is the only baby bank in the Trafford area and of the families it serves, 58% are single-parent households already struggling with the cost of raising children, while 29% are fleeing domestic abuse, often leaving their belongings behind to protect their family.

With their circular economy model, they also help reduce waste whilst providing “a trusted link between the families that have items to give, to those that need them the most”, with D’Albertanson adding, “If we lose this charity, we lose a vital safety net for many in our community.”

A service user commented: “It was a truly terrifying time when I was pregnant with my first child. I found myself completely alone, with a baby on the way, wondering how I could possibly provide for my son.

“Then I found Little Green Sock Project, and everything changed. Everything was carefully chosen, colour-coordinated, and presented in such a thoughtful way. It felt so special—like someone truly cared about me and my baby. That feeling is indescribable, especially for someone in my position.

“There are so many people like me with stories like this. It breaks my heart to think that the Little Green Sock Project might have to close its doors. I can’t imagine what my life would have been like without your help, and I hope with all my heart that the community comes together to keep this lifeline alive.”

Manchester parents need this much-loved baby bank – let’s not let it fall away on our watch. (Credit: Andy Bate at Royal Foundation)

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Every pound donated goes towards helping find the Little Green Sock Project a new home, but people can help contribute in other ways, once again, by spreading the word or getting their hands dirty in person.

Greater Manchester never fails to amaze when it rallies behind causes like this, and we’re sure you won’t let us down this time either. Let’s keep the lights on the lifelines for local families intact.

You can donate now, or to find out other ways to do your bit, click HERE.

For all the latest news, events and goings on in Greater Manchester, subscribe to The Manc newsletter HERE.

Featured Images — Little Green Sock Project/Andy Bate – Royal Foundation (supplied)

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Government to begin giving millions of UK workers ‘significant’ pay rises from this week

Emily Sergeant Emily Sergeant

The Government is to begin giving more than three million workers across the UK a ‘significant pay boost’ from this week.

Announced as part of last year’s Budget, and in a bid to ‘put thousands of pounds back in the pockets of working people every year’, the Government confirmed back at the beginning of February that a new National Living Wage of £12.21 per hour, and a new National Minimum Wage of £10 per hour would take effect from April onwards.

Ministers said the 6.7% increase to the National Living Wage – which is now worth £1,400 a year for an eligible full-time worker – is a ‘significant step’ towards delivering the manifesto commitment to deliver a ‘genuine’ living wage.  

On top of this, the National Minimum Wage for 18-20-year-olds is also set to go up by a record increase of £1.40 an hour, which means full-time younger workers eligible for the rate will see their pay boosted by £2,500 a year.  

The minimum wage pay boot has also been called the first step towards removing the ‘unfair’ age-bands that see a 21-year-old getting paid more than a 20-year-old for doing the same job. 

According to the Government, this is also the first time the National Living Wage has taken into account the cost of living and inflation.

Three million UK workers will be getting a ‘significant’ pay rise from this week / Credit: Pexels

“In the last Parliament, living standards were the worst on record and sky-high inflation was crushing working people’s finances,” commented Chancellor Rachel Reeves, explaining why the pay boosts are being introduced.

“Making work pay is good for workers, will strengthen businesses’ workforces, and will grow our economy for years to come.

“It’s a key milestone on my number one mission to get more money in people’s pockets as we deliver our Plan for Change.”

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Not only that, but the minimum hourly wage for an apprentice is also set to be boosted later this year too, with an 18-year-old apprentice seeing their minimum hourly pay increase by 18% to £7.55 an hour. 

As a result of these particular changes, a further four million workers also could benefit from the positive spill-over impacts of the rate increases.   

Featured Image –

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