Nick Eardley
Political correspondent, at Westminster Hall

The government is bringing forward its plan to cut the basic rate of income tax by a year.

But the decision to scrap the additional rate of income tax is a big move. It will benefit those on the highest salaries.

The government will hope the measure get the economy moving and encourage high tax payers to the UK. Opposition parties will argue it's a tax cut for the rich.

"I can announce today that we will cut the basic rate of income tax to 19p in April 2023 – one year early," says Kwarteng. "That means a tax cut for over 31m people in just a few months’ time. That means we will have one of the most competitive and pro-growth income tax systems in the world."

The chancellor is also abolishing the top rate of income tax - a major benefit for the highest earners in the country.

The highest rate of income tax is currently 45% and paid by those earning over £150,000.

"From April 2023 we will have a single higher rate of income tax of 40%. This will simplify the tax system and make Britain more competitive," said Kwarteng.

"It will reward enterprise and work. It will incentivise growth. It will benefit the whole economy and the whole country.

"And, Mr Speaker, after all, this only returns us to the same top rate we had for 20 years - including the entire time the opposition was last in power - bar one month."

The chancellor announces a cut to the Stamp Duty tax in England and Northern Ireland.

The cut raises the threshold of how much a property has to cost before stamp duty is paid to £250,000.

First time buyers currently pay no stamp duty on the first £300,000, that will be raised to £425,000.

"And we’re going to increase the value of the property on which first-time buyers can claim relief, from £500,000 to £625,000," he says. "The steps we’ve taken today mean 200,000 more people will be taken out of paying stamp duty altogether. This is a permanent cut to stamp duty, effective from today."

Stamp duty is a tax paid when you buy a property, external.

The chancellor has announced an 18-month transitional measure for wine duty.

The government will also extend draught relief to cover smaller kegs of 20 litres and above, "to help smaller breweries".

The planned increases in the duty rates for beer, for cider, for wine, and for spirits will all be cancelled, he adds.

On the controversial subject on bankers' bonuses, Kwarteng defended his decision to end the cap on them by saying: "A strong UK economy has always depended on a strong financial services sector. We need global banks to create jobs here, invest here, and pay taxes here in London, not Paris, not Frankfurt, not New York.

"All the bonus cap did was to push up the basic salaries of bankers, or drive activity outside Europe. It never capped total remuneration, so let’s not sit here and pretend otherwise."

The chancellor reiterates that a recent rise in National Insurance - a tax people pay in their earnings - will be reversed from 6 November.

Ex-Chancellor Rishi Sunak increased National Insurance by 1.25p in the pound in April - saying the money would fund health and social care.

Liz Truss’s government says that funding will now come from general taxation.

VAT-free shopping for overseas visitors is to be introduced, Kwasi Kwarteng announces.

He says this is part of the UK's drive to "modernise".

Nick Eardley
Chief Political correspondent

We’re getting to the heart of the government’s new economic vision.

Kwasi Kwarteng thinks growth comes from making the economy more competitive. That’s why taxes are being cut and regulation slashed.

The chancellor argues his plans are simple and fairer. We’ll hear later from those who disagree.

The chancellor has announced the government will legislate to require trade unions to put pay offers from employers to a vote of members.

This is so strikes can only be called once negotiations have fully broken down, Kwarteng told the Commons.

The chancellor confirms the government is scrapping a planned increase in the amount of tax companies pay on their profits.

Corporation tax had been due to rise from 19% to 25%, under plans drawn up by previous PM Boris Johnson.

He planned to raise money while keeping the UK’s rate “competitive”.

Those who support cutting corporation tax argue that it attracts companies to the UK and encourages investment, which means more money is eventually paid to the government through taxes.

However, cutting corporation tax doesn’t always raise more money.

Image source, UK Parliament

There are to be more than 40 new so-called investment zones in England, Kwasi Kwarteng tells MPs in the Commons.

The zones – which will pop up in areas including the West Midlands, the Tees Valley and Somerset – will be allowed to relax planning rules and reduce business taxes to encourage investment.

The chancellor scraps rules which cap bankers’ bonuses.

The cap was introduced across the EU in 2014 (when the UK was still a member) following the global financial crisis.

Under the current rules, a banker's bonus cannot be higher than twice their annual salary - unless shareholders agree.

Some city bosses say the cap leads to higher base pay, pushing up banks' fixed costs and making the UK less attractive than the US or Asia.

Critics say uncapped bonuses lead bankers taking the kind of excessive risk that spawned the 2008 financial crisis in the hope of receiving larger one-off bonuses.

The chancellor says the energy package will cost £60 billion for the six months from October.

Our aim over the medium term is to reach a trend rate of growth, Kwasi Kwarteng tells MPs, "of 2.5%".

He says the government will do that by expanding the supply side of the economy through tax incentives and reform.

"That is how we will turn this vicious cycle of stagnation into a virtuous cycle of growth," he says, adding the government wants to focus on growth "even where that means taking difficult decisions".

We are at the start of a "new era", Kwarteng says, to the sound of loud jeers from opposition benches.

There are too many barriers and the supply side of the economy needs to be reformed, he adds.

In due course the government will set out plan as to how we will reduce debt relative to GDP, the chancellor says.

The government is not releasing independent analysis of today's mini-budget announcements, but Kwarteng says costings will be published later today.

He says it is "entirely appropriate for the government to use our borrowing powers to fund temporary measures to support families and businesses".

He adds: "That's what we did during the Covid-19 pandemic. A sizeable intervention was right then...and it is right now. The price of inaction would have been far greater than the cost of these schemes."

Kwarteng says the government plans to expand the supply side of the economy through tax incentives and reform.

He says this is how the government will deliver higher wages, greater opportunities and fund public services now and in the future, as well as compete with economies around the world.

Nick Eardley
Chief political correspondent

A reminder from the chancellor as we start about the biggest challenge facing the British people: the price of energy.

This is where a lot of government borrowing is coming from. Ministers could spend tens of billions helping subside bills in the next couple of years.

But much more borrowing will come from choices over tax; cutting national insurance, cancelling corporation tax rises and other measures. The government is banking on this helping to stimulate growth.

"Growth is not as high as it should be", the chancellor says.

"This has made it harder to pay for public services requiring taxes to rise, in turn higher taxes on capital, higher taxes on labour, have lowered returns on investment and work, reducing economic incentives and hampering growth still further," he says,

"We are determined to break that cycle," he states. "We need a new approach for a new era."

Image source, UK Parliament

The chancellor says businesses need to be supported.

The energy bill relief scheme will reduce wholesale energy costs for all UK businesses, charities and the public sector, he says.

This will provide a price guarantee equivalent to that of households.

Announcing an energy markets financing scheme delivered with the bank of England, Kwasi Kwarteng says this will provide a 100% guarantee for commercial banks to offer emergency liquidity to energy traders.

He then goes on to make the claim mentioned above, saying the consensus among "independent forecasters" is that the government's energy plan will reduce peak inflation by around five percentage points.

"During the worst energy crisis in generations, this government is on the side of the people," he says.