The plans – to be a central part of Mr. Kwarteng’s emergency budget on Friday – caused horror among green groups, who warned that they were jeopardizing the country’s natural beauty due to a wave of shoddy developments.
The budget will include a “growth plan” that will include measures to tackle high energy prices and inflation and accelerate large infrastructure projects, along with a network of investment zones where planning rules will be changed to encourage development.
Mr. Kwarteng should say that the highly controversial initiatives – along with a series of tax cuts for businesses and the wealthy – will help break a “cycle of stagnation” that has stalled growth and increased taxes.
He will say that boosting growth by lowering taxes and cutting regulations is the “core mission” of Liz Truss’s government, which promises to usher in a “new era” of higher wages, more opportunities and tax revenues to finance public services.
Pointing to the fierce opposition he expects to his plans, he will tell MPs: “We will be bold and shameless in pursuing growth, even when it means making tough decisions.”
But the director of policies at the rural charity CPR, Tom Fyans, warned, “This government’s obsession with driving growth at all costs is alarming and will not end well for the countryside or our rural communities.”
Describing investment zones as “steroid deregulation,” Fyans said: “Successive governments have already severely weakened planning controls, and the result has been a decade of disastrous planning. Research by CPRE in 2020 revealed that 75 % of all new homes were either mediocre or of poor quality.
“This government presents a false choice between being green and stimulating economic growth.”
Friends of the Earth policy chief Mike Childs said plans to weaken environmental safeguards are “deeply troubling.”
“The chancellor considers economic growth and environmental protection to be mutually exclusive, but they are not,” he said. “It is this tired thinking that is driving the energy, climate and ecological crises we are facing.”
Deploring the Chancellor’s failure to use the mini-budget to come up with a plan to insulate homes, Childs said: “We really needed this budget to alleviate the emergency cost of living, restore nature and reduce emissions. cause climate change, but it completely fails in all respects.
With the Bank of England raising interest rates as the UK officially slipped into recession, economists have warned that Ms. Truss’s plans – involving a massive increase in state lending – are putting the nation’s finances up. an “unsustainable” path.
The 0.50 percent increase in base rates was less than the 0.75 expected by most city forecasters, but left the cost of borrowing at 14-year maximum at 2.25 percent while the Bank struggled to curb inflation.
The Independent Institute for Tax Studies has calculated that even after Mr Kwarteng’s package, the average worker will be £ 500 worse in real terms than last year, a cut of about 3% in their income.
And the Joseph Rowntree Foundation said millions of Britain’s poorest people were “left in the cold” by the chancellor.
Mr. Kwarteng announced Thursday that predecessor Rishi Sunak’s 1.25 percent increase in Social Security would be canceled as of November 6, fulfilling a flagship commitment of Ms. Truss’s Tory leadership campaign.
And it should use its mini-budget to eliminate Sunak’s planned corporate tax hike from 19p to 25p, as well as cut the stamp duty paid on home purchases worth more than £ 125,000.
Together, the moves amount to an unfunded tax cut of more than £ 30 billion and the chancellor has controversially rejected offers from the Office of Fiscal Responsibility to pass judgment on their impact on public finances.
Treasury data showed the NI cut will be worth an average of £ 3,890 for the highest earners over £ 150,000 a year, £ 175 for those earning less than £ 50,000, and nothing for people paid under £ 12,750. .
The low-wage think tank, the Resolution Foundation, said the chancellor “gave more to those who need less help.”
Some 38 combined union councils and authorities across England – ranging from the West Midlands to Tees Valley, Somerset and Hull – are in talks with the government to bid for investment zones within their area.
Each zone will offer “generous” and time-limited tax cuts to businesses, along with liberalized planning rules to accelerate development and free up land for the construction of homes, factories, offices and shops, the Treasury said.
This could include ending height restrictions on developments and fixed rates for affordable homes to replace levels currently negotiated based on local needs.
Meanwhile, the growth plan will accelerate construction of up to 100 road and rail projects, nuclear power plants and wind farms by reducing environmental requirements and easing regulations to protect habitats and species.
Citing examples of seven years of delay in road projects and 13 years of approval for an offshore wind farm, Kwarteng will say: “The time it takes to obtain consent for significant projects nationwide is getting slower, not faster, while our international competitors are advancing.
“We will liberalize planning rules at specific agreed sites, freeing up land and accelerating development.
“And we will cut taxes, with businesses in designated sites benefiting from generous tax breaks.”
Shevaun Haviland, Director General of the British Chambers of Commerce, said companies “would welcome” the Chancellor’s commitment to focus on growth and “act on our creaky planning system.”
Haviland said investment zones have the potential to deliver on government leveling promises, but warned of the risk that they will simply “shift growth and investment from one area to another without creating new economic activity.”
Labor Treasury spokesman Pat McFadden said Ms. Truss’s decision to pile up government debt at a time of skyrocketing inflation and rising interest rates did not amount to a “new plan for economic growth.”
“They just went from leveling up to trickling down and that hasn’t worked in the past,” he said
“The whole pattern of changing Tory leaders every two years and pretending it’s a fresh start has created instability and chaos. What Britain needs right now is a government that can give business certainty, secure our economy and make it grow. The Tories can’t offer it. ”
Liberal Democratic Treasury spokeswoman Sarah Olney said: “Kwasi Kwarteng served as growth minister for three years and now claims to have presided over a vicious cycle of stagnation. It is a shocking admission of the damage done to our economy in years of incompetence and chaos under this conservative government. “