A cut in the basic rate of income tax from 20p to 19p and the abolition of the 45p tax rate on earnings over £150,000 are two of the major changes in Kwasi Kwarteng’s Budget-that’s-not-a-Budget. While those earning £20,000 a year will be only £200 a year better off, however, those making £200,000 will be as much as £4,000 better off.
When it comes to household finances the difference is even more stark. After accounting for the announced reduction in income tax rates, dividend rates and the cancellation of the planned rise in National Insurance, the bottom 10 per cent of earners can expect to see next to no improvement in their family income, whereas the top 10 per cent will get an improvement of nearly £100 a week. These are according to figures from the Institute for Public Policy Research's tax-benefit model.
The message from this budget, then, is a boon for the rich and little for everyone else.
[See also: Kwasi Kwarteng scraps 45% top tax rate]