Government Growth Plan September 2022

Energy Price Guarantee for households announced on September 8, 2022.

Energy Bill Relief Scheme for business announced September 21, 2022.

Government Growth Plan September 23, 2022 - Announced in the mini-budget on September 23 (see below)

[edit] Summary

'Chancellor unveils new growth plan, tackling energy costs to bring down inflation, backing business and helping households... target for 2.5% trend of growth, securing sustainable funding for public services and improving living standards for everyone.'

• Corporation tax rise cancelled, keeping it at 19% as government sets sights on 2.5% trend rate of growth.
• Basic rate of income tax cut to 19% in April 2023 – one year earlier than planned – with 31 million people getting on average £170 more per year.
• Stamp duty cuts to help people on all levels of the property market and lift 200,000 homebuyers out of paying the tax altogether.

The Chancellor of the Exchequer, Kwasi Kwarteng, said: “Economic growth isn’t some academic term with no connection to the real world. It means more jobs, higher pay and more money to fund public services, like schools and the NHS. This will not happen overnight but the tax cuts and reforms I’ve announced today – the biggest package in generations – send a clear signal that growth is our priority. Cuts to stamp duty will get the housing market moving and support first-time buyers to put down roots. New Investment Zones will bring business investment and release land for new homes in communities across the country. And we’re accelerating new road, rail and energy projects by removing restrictions that have slowed down progress for too long.We want businesses to invest in the UK, we want the brightest and the best to work here and we want better living standards for everyone.”

[edit] Major cuts to stamp duty land tax

• The nil rate band will be doubled from £125,000 to £250,000.
• First time buyers now pay no stamp duty up to £425,000.
• The value of the property on which first time buyers can claim relief is increased from £500,000 to £625,000.
• Further support for homebuyers by the disposal of surplus government land to build new homes.

[edit] Energy

• The Energy Price Guarantee will save the typical household £1,000 a year on their energy bill.
• The Energy Bill Relief Scheme will halve the cost of business energy bills, reducing peak inflation by about 5 percentage points.

[edit] Investment zones

• Discussion are being held with 38 local authority areas in England to set up investment zones. Each investment zone will offer generous, targeted and time limited tax cuts for businesses and liberalised planning rules to release more land for housing and commercial development.
• The Government will change regulations to increase investment by pension funds into UK assets, benefiting savers, boosting economic growth, and incentivising investment into Britain’s science and tech companies.

[edit] Infrastructure

• The chancellor announced plans to accelerate new roads, rail and energy infrastructure. In 2021 it took 65 per cent longer to get consent for major infrastructure projects than in 2012. New legislation will cut barriers and restrictions, making it quicker to plan and build new roads, speeding up the deployment of energy infrastructure like offshore wind farms and streamlining environmental assessments and regulations.

[edit] Other tax reforms

• Cancelling the planned rise in corporation tax, keeping it the lowest in the G20 at 19%.
• Reversing the 1.25% rise in national insurance contributions
• Relief for businesses by making the annual investment allowance £1 million permanently, rather than letting it return to £200,000 in March 2023. 100% tax relief to businesses on plant and machinery investments up to £1 million.
• Specific support for pubs and hospitality, freezing alcohol duty for a year. The government will publish a consultation on reforms to modernise alcohol duties.
• 1p cut to the basic rate of income tax one year earlier than planned. From April 2023, the basic rate of income tax will be cut to 19% meaning 31 million people will be better off by an average of £170 per year.
• Abolished the additional rate of tax from April 2023 replaced by a single higher rate of income tax of 40%. This removes the top rate of tax, designed to attract talent and helping businesses innovate and grow.

[edit] Universal credit and jobseekers

• Universal credit claimants who earn less than the equivalent of 15 hours a week at the National Living Wage will be required to meet with their work coach and take active steps to increase their earnings or face having their benefits reduced.
• Jobseekers over 50 will also be given extra time with jobcentre work coaches, to return to the jobs market. Returning to pre-pandemic activity rates in the over 50s could boost the level of GDP by 0.5-1 %.

[edit] Scotland, Wales and Northern Ireland

The majority of announcements are UK-wide, however the Scottish government is expected to receive more than £600 million extra funding over the 2021 spending review period as a result of the changes to income tax and stamp duty, and the Welsh Government will receive around £70 million over the same period as a result of the change to stamp duty. The reversal of the health and social care levy will save 4.3 million people across Scotland, Wales and Northern Ireland more than £230 on average next year.

In the coming weeks, the Government will set out further details of plans to speed up digital infrastructure, reform business regulation, increase housing supply, improve the immigration system, make childcare cheaper, improve farming productivity and support financial services.

For more information visit here.

[edit] Related articles on Designing Buildings

• Energy
• Energy Price Guarantee
• Energy Bill Relief Scheme
• Infrastructure
• Tax