• Chancellor unveils bold new growth plan, backing business and improving living standards for everyone in the UK.
• 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 and 1.2 million people in Wales to get National Insurance cut worth £235.
• Welsh Government receives around £70 million as a result of tax cuts elsewhere in the UK.

On Friday 23rd September the Chancellor unveiled his Growth Plan to release the huge potential in the UK economy, tackling inflation and delivering higher productivity and wages.

Kwasi Kwarteng set out a bold plan backing business and putting them on a path of economic growth. The basic rate of income tax in Wales will be cut to 19% from April 2023, worth an average of £170 and 1.2 million workers in Wales will see a cut in their National Insurance worth an average of £235 a year.

Cuts to Stamp Duty in England and Northern Ireland will also see the Welsh Government receive around £70 million over the three-year 2021 Spending Review period.

Boosting economic growth will enable stable funding for public services, higher wages and greater opportunities for the whole UK.

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. 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.

We want businesses across Wales to keep more of their own money to invest, innovate, and grow. Our income tax and national insurance cuts will mean hundreds of pounds a year more in the pockets of over a million workers in Wales.

And our Energy Bill Relief Scheme is protecting thousands of businesses across Wales from rising energy costs with discounts of wholesale gas and electricity prices.

Our Growth Plan sets the whole United Kingdom on the path for growth, building on the fiscal strength of our Union and releasing the enormous potential of this country.

Secretary of State for Wales, Robert Buckland said:

Today’s bold measures put economic growth at the heart of our plans for Wales and the UK.

The UK Government has already committed to protect Welsh households and businesses from rising prices through the Energy Bill Relief Scheme. But a healthy, growing economy is the best long-term solution to the enormous financial pressures facing the entire country.

By driving investment, cutting taxes, and backing business, the UK Government will get more people into well-paid jobs, allow workers to keep more of their hard earned money and get the Welsh economy growing again.

Setting out the first steps towards growth today, Kwasi Kwarteng revealed major tax reforms to allow businesses to keep more of their own money, encouraging investment, boosting productivity and creating jobs. New measures include cancelling the planned rise in corporation tax, keeping it the lowest in the G20 at 19%, and reversing the 1.25% rise in National Insurance contributions, a change which will save 920,000 UK businesses almost £10,000 on average next year and 1.2 million people in Wales an average of £235 a year.

The Chancellor also set out plans to tackle to the biggest drag on growth – the high cost of energy driven by Vladimir Putin’s invasion of Ukraine which has driven up inflation. To tackle this the government’s Energy Price Guarantee will save the typical household £1,000 a year on their energy bill and halve the cost of business energy bills, reducing peak inflation by about 5 percentage points.

It was also confirmed that the UK Government will look to work with the Welsh Government and local authorities to set up Investment Zones in specific sites across the UK. 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. These will be hubs for growth, encouraging investment in new shopping centres, restaurants, apartments and offices, and creating thriving new communities.

Revealing further tax reforms, Kwasi Kwarteng outlined sector specific support for pubs and hospitality, freezing alcohol duty for another year. Reforms to modernise alcohol duties will also be taken forward. The new measures backing business come on top of the government’s Energy Bill Relief Scheme for businesses to cap costs per unit, which will protect them from soaring energy costs this winter by providing a discount on wholesale gas and electricity prices.

The Chancellor also reiterated the important principle of people keeping more of what they earn, incentivising work and enterprise. He announced a 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% and will mean over 31 million people will be better off by an average of £170 per year. Alongside cutting the basic rate of income tax, the Chancellor also abolished the additional rate of tax, taking effect from April 2023. In its place will be a single higher rate of income tax of 40%. The move is designed to attract the best and the brightest to the UK workforce, helping businesses innovate and grow.

The Chancellor also announced more relief for businesses by making the Annual Investment Allowance £1 million permanent, rather than letting it return to £200,000 in March 2023. This will mean businesses can deduct 100% of the cost of qualifying plant and machinery in the first year.

New measures were also announced to help people on low incomes secure more and better paid work. Universal Credit claimants who are earn less than the equivalent of 15 hours a week at National Living Wage will be required to meet regularly with their Work Coach and take active steps to increase their earnings or face having their benefits reduced. This change is expected to bring in an additional 120,000 people into the more intensive work search regime.

Jobseekers over the age of 50 will also be given extra time with job centre work coaches, to help them return to the jobs market. Rising economic inactivity in the over 50s is contributing to shortages in the jobs market, driving up inflation and limiting growth. Returning to pre-pandemic activity rates in the over 50s could boost the level of GDP by 0.5-1 percentage points.

Over the three-year Spending Review 2021 period, the Welsh Government is expected to receive around £70 million of additional funding as a result of the changes to Stamp Duty Land Tax.

Connor Morrison of 23 Parachute Engineer Regiment died during a non-operational incident in Ipswich on 23rd July 2022.

The government’s independent review into the delivery of net zero climate commitments is launched today (Monday 26 September), with a focus on ensuring the UK’s fight against climate change maximises economic growth, while increasing energy security and affordability for consumers and businesses.

The UK’s target to reach net zero by 2050 remains in place. Former Energy Minister Chris Skidmore MP will lead the rapid review of the government’s approach to delivering its net zero target, after being commissioned by the Business and Energy Secretary Jacob Rees-Mogg.

It comes a year after the government published its Net Zero Strategy, setting out an overarching approach to carbon neutrality. Since then, there have been major changes to the economic and political landscape: Russia’s illegal invasion of Ukraine, historically high global energy prices and high inflation. These changes have placed huge pressures on British households and businesses and make it vital that the UK reaches Net Zero in a way that avoids exporting industry and emissions overseas.

This new review aims to identify new ways to deliver the legally binding target by 2050 in a way that is pro-business and pro-growth. The review will examine:

• what the most pro-business, pro-growth and economically efficient path to reaching net zero is
• how to maximise the economic opportunities that the target presents as well as increase innovation, investment, exports and jobs
• what the economic costs and benefits are associated with new and emerging policies and technologies

To do this, Mr Skidmore’s review will consider a range of evidence, consulting widely with consumers, investors, industrial leaders and experts in various fields including energy, land use and transport. He will report to the government with a set of recommendations by the end of this year to help turbocharge our transition to net zero by identifying key economic opportunities.

He will also be holding a series of roundtables across the country, seeking as many views as possible to ensure that people not only reap the environmental benefits of tackling climate change, but the economic benefits too.

Chair of the Net Zero Review Chris Skidmore said:

The UK continues to lead the world on tackling climate change, having been the first G7 country to commit in law to net zero carbon dioxide emissions by 2050.

This review seeks to ‘double down’ on how we can ensure that our energy transition happens at the same time as maximising the economic opportunity for businesses and households across the country, providing huge opportunities for innovation, investment, exports and jobs. I want to ensure that net zero isn’t just viewed as the right thing to do for our environment- but becomes an essential driver of economic growth.

I’m kicking off a 3-month review today to find the best ways of making this happen – speaking to as many people in as many sectors and regions as possible, to ensure the review generates fresh policy ideas that can ensure we deliver a ‘big bang’ moment for net zero.

Secretary of State for Business and Energy, Jacob Rees Mogg, said:

The government remains committed to reaching our net zero emissions targets, but with Russia weaponising energy across Europe we must make sure we do so in a way that increases energy security and does not place undue burdens on businesses or consumers.

Chris Skidmore’s rapid review will help us identify how best to make that happen, while also ensuring all parts of the UK reap the economic benefits of tackling climate change that I have no doubt will be on offer.

The UK has already managed to grow its economy by 76%, while cutting its emissions by over 44% since 1990 – decarbonising faster than any other G7 country.  Official statistics also show there are already around 400,000 jobs in low-carbon businesses and their supply chains across the UK, with turnover estimated at £41.2 billion in 2020. Both the British Energy Security Strategy and Net Zero Strategy aim to leverage an additional and unprecedented £100 billion of private investment, while supporting an additional 480,000 British jobs by 2030.

Over the past year, a range of companies have sought to invest in the UK’s green infrastructure, creating jobs across the country, including:

• JDR Cable Systems in Hartlepool, who are on track with construction of a £130 million subsea cable facility in Blyth, creating 171 high quality local jobs on completion
• Siemens Gamesa, who are investing £186 million into expanding its offshore wind blade factory in Hull
• Rolls Royce, who have secured £490 million for its small modular reactors programme
• ScottishPower, who are investing £150 million into a 100MW green hydrogen plant in Felixstowe to power trains, trucks and ships

All this comes as there is clear support for climate action in the UK, but in a way that benefits the economy as well as the environment.

Jonathan Geldart, Director General of the Institute of Directors, said:

We welcome the government’s commitment to working closely with business to make its world-leading net zero by 2050 target a reality.

The UK business community recognises the importance of building a sustainable economy and the transition to net zero is more important than ever, given the imperative of reducing business dependence on expensive fossil fuels. Business needs an evidence-based, long-term vision from government so that they can build net zero into their planning and maximise its economic potential.

We look forward to working with the government independent review in the coming months to ensure that the UK can deliver net zero in a way that maximises the opportunities for UK businesses.

Dan McGrail, Chief Executive at RenewableUK, said:

This review gives us the chance to ensure that the UK makes the most of cheap renewable power to deliver net zero at lowest cost and boost competitiveness across the economy.

Cheap, clean energy is fundamental to growing new high-value technologies, decarbonising the UK’s industrial base and boosting exports.

Whether it’s building up the supply chain for the £175 billion of planned investment in wind energy or developing a globally competitive green hydrogen sector, there are huge opportunities to further grow the UK’s economy as we cut our dependence on fossil fuels.

Read the Net zero review: terms of reference.

Under the UK’s presidency of COP26, net zero commitments now cover more than 90% of global GDP – up from 30% 2 years ago. The Glasgow Climate Pact focused the eyes of the world on bolstering action, including getting 190 countries to agree to phasing out coal. And work continues to encourage countries to revisit and strengthen Nationally Determined Contributions (NDCs) that are not currently aligned with the Paris Agreement temperature goal.

Read the Net Zero Strategy and government’s latest British Energy Security Strategy.