'Tax cuts for the rich and misery for everyone else' - MPs slam mini-budget as Pound sinks to 37-year low and cap lifted on bankers’ bonuses

The pound plummeted after Chancellor Kwasi Kwarteng announced the biggest raft of tax cuts for half a century, in a “gamble” to raise falling living standards by boosting growth.

In a speech this morning (Friday, September 23) Mr Kwarteng set out plans for extra borrowing worth more than £70 billion, cuts to income tax and stamp duty and new rules to make it harder for trade unions to call strikes.

Prime Minister Liz Truss's new spending chief told Parliament tax cuts would be “central to solving the riddle of growth”, as he also confirmed plans to axe the cap on bankers’ bonuses and tighten benefits rules.

But the proposals saw the pound dive to a 37-year low and prompted stinging criticism from opponents.

Chancellor Kwasi Kwarteng delivered his "mini-budget" to the House of Commons, prompting a slump in the value of the pound. (Jessica Taylor/UK Parliament via AP)

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South Shields MP Emma Lewell-Buck called the spending plans “terrifying” and “driven by misguided outdated ideology”.

She added: "This is tax cuts for the rich and misery for everyone else.

"This isn’t just supercharged Conservatism, it is a gamble with our lives, livelihoods and our countries’ future.

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South Shields MP, Emma Lewell-Buck.

"The new PM, her Chancellor and the Cabinet proved today what we all have feared, this is a very dangerous Government.”

Ministers have already confirmed measures to help households and businesses cope with rising energy bills, which the new budget has estimated will cost about £60 billion over the first six months from October.

Changes to benefits rules will mean Universal Credit claimants will be forced to show they are actively looking for more and better-paid work, or face having their benefits reduced.

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A planned alcohol duty hike on beer, cider, wine and spirits has also been cancelled, at a predicted cost to the treasury of £600 million.

Jarrow MP Kate Osborne

Jarrow Kate Osborne MP called the proposals an “unashamed budget for the rich”.

She added: “Tax cuts for the wealthiest, removal of the bankers bonus cap, handouts to big business and energy giants - while attacking part time workers, attacking trade unions, reducing benefits for the most vulnerable and reducing stamp duty.

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"The Tories expect people to be grateful that energy bills are not now quadrupling when they have already doubled.

"Families in my constituency of Jarrow are struggling and crying out for help - instead we have the same old Tories paying for tax cuts for the wealthy few by creating debt for the many.”

The spending plans were announced a day after the Bank of England warned the UK may already be in a recession and lifted interest rates to 2.25%.

Paul Johnson, the director of the Institute for Fiscal Studies economic think tank, said Mr Kwarteng’s “big gamble” was the “biggest tax-cutting event since 1972” and predicted further interest rate rises.

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The Joseph Rowntree Foundation, an anti-poverty campaigner, said it shows the Government has “no understanding of the economic reality facing millions across the UK”, a sentiment echoed by the North East Child Poverty Commission.

Anna Turley, the commission’s chairman, said: “Families in the North East already struggling to keep their heads above water – in and out of work – heard nothing about how the Government intends to protect them from severe hardship in the coming months.

‘The disconnect between the announcements made today and the reality of rising child poverty in every part our region, is absolutely astonishing.”