Sturgeon: Super wealthy ‘laughing all the way to the bank’ after mini-budget

The super wealthy are “laughing all the way to the actual bank”, Scotland’s First Minister has said after the Chancellor unveiled plans he said would drive economic growth.

Chancellor Kwasi Kwarteng, announcing his so-called mini-budget on Friday, announced the scrapping of the top rate of income tax and a reduction of the basic rate to 19p in the pound.

As a result of the income tax reduction, and a cut in stamp duty, the Treasury said the Scottish Government will receive £600 million over the three-year period covered by the 2021 spending review.

Kwasi Kwarteng leaving No 11
The Chancellor announced the plans on Friday (Aaron Chown/PA)

The rise in national insurance proposed under Boris Johnson has also been cancelled, benefiting 2.3 million people in Scotland, the Treasury said.

Mr Kwarteng also added restrictions to the benefits system and scrapped the cap on banker’s bonuses as he spent tens of billions of pounds to drive growth.

The Chancellor said while an increase in jobs, wages and public funding “will not happen overnight”, the statement sent a clear signal “that growth is our priority”.

“The fiscal strength of the UK Government has allowed thousands of businesses in Scotland to keep more of their own money to invest, innovate, and grow,” he said.

“We are cutting national insurance for 2.3 million Scottish workers, saving them an average of £285.

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

“In doing so, our growth plan sets the whole United Kingdom on the path for growth, building on the strength of our Union and releasing the enormous potential of this country.”

But Nicola Sturgeon has taken aim at the plans, which she said on Twitter would benefit the rich while working people struggled.

“The super wealthy laughing all the way to the actual bank (tho I suspect many of them will also be appalled by the moral bankruptcy of the Tories) while increasing numbers of the rest relying on food banks – all thanks to the incompetence and recklessness of this failed UK Gov,” she said on Twitter.

The First Minister later tweeted again, hinting that the Scottish Government would not follow the tax policies of Westminster.

“A UK gov ‘budget’ that benefits wealthiest over poor/middle income earners, tanks the £, pushes up the cost of (v substantial) borrowing, and is castigated as reckless,” she said.

“And yet Tories (& right wing commentators) will demand that @scotgov blindly follows suit. Mmm …”

PA infographic showing basic rate of UK income tax
(PA Graphics)

Deputy First Minister John Swinney, who is responsible for the finance brief while Finance Secretary Kate Forbes is on maternity leave, said the statement will be “cold comfort to the millions of people across Scotland who have been looking for the UK Government to use their reserved powers to provide support for those that need it most”.

“Instead we get tax cuts for the rich and nothing for those who need it most,” he added.

“We estimate that the increase in the price cap to £2,500 will force an estimated 150,000 more Scottish households into extreme fuel poverty.

“Instead of offering these people support, the Chancellor is threatening to cut their family budgets further, with a new regime of benefit sanctions.”

The growth plan, Mr Swinney said, will only lead to “growth in inequality”.

He said that the Scottish Government would announce any changes to Land and Building Transaction Tax (LBTT) – the Scottish equivalent to stamp duty – as part of the “normal budget process”, signalling no immediate changes will be made.

PA infographic showing stamp duty threshold
(PA Graphics)

The Deputy First Minister also pledged to “keep discussing” plans for special investment zones, but said the plans, which would provide tax cuts and more lax planning rules, would have to be “the right fit for Scotland”.

Scottish Green finance spokesman Ross Greer said the budget was for “banks, the super-rich and big polluters”.

“It is targeting entirely the wrong things and will only serve to help the rich get even richer while punishing people on low incomes and those who rely the most on public services,” he added.

But Scottish Secretary Alister Jack hailed the plans as “ambitious”, adding: “A strong economy is the best way to tackle the cost of living challenges we are all facing due to Russia’s invasion of Ukraine.

“Our Plan for Growth will support households and businesses in Scotland, while driving economic growth to deliver jobs, investment and prosperity.

“The UK Government is delivering for the people of Scotland when it really matters.”