New Government Outlines Radical Economic Plan
New Government Outlines Radical Economic Plan
Former Childcare Minister, Liz Truss, was appointed Prime Minister by the late Queen on 6th September. At the time, it was expected that she would take immediate action with regard to rising energy prices and inflation pushing up the cost of living. The period of public mourning meant these announcements were paused for several days, but the new Chancellor of the Exchequer, Kwasi Kwarteng has now presented his intentions.
For the childcare sector, there is some good news. Energy costs for businesses are expected to be capped at £211 per MWh for electricity and £75 per MWh for gas, however, this is in part funded by the removal of green levies. The rise in National Insurance payments is also to be scrapped, although critics have noted that this benefits high earners more than those at the lower end of the pay scale. Kwarteng and Truss have both indicated they do not see redistribution as a priority, and believe that their policies will stimulate economic growth.
These policies form part of a wider package of tax cuts that were the centrepiece of Truss’s successful leadership bid. So far the reaction by the markets seems to have been negative, with the value of the pound dropping substantially, hitting its lowest level against the dollar for fifty years and the Bank of England suggesting it will need to step in with emergency measures. The government however maintains these changes are needed to ensure growth and at the time of writing seems determined to continue.