Kwarteng accused of bid to avoid scrutiny of £30bn tax cut package
Kwasi Kwarteng is paving the way to delay his first full budget until next year, amid growing concerns that he is avoiding scrutiny of a huge programme of tax cuts likely to break the government’s existing fiscal rules.
The chancellor will unveil his plans for £30bn in tax cuts and more details of the energy price cap announced by Liz Truss as part of a “mini-budget” on Friday. It is likely to frame the political debate for some time. However, he is preparing to overhaul existing fiscal rules in the months ahead to ensure the programme can satisfy them.
The tax cuts are set to breach an existing rule that debt should be falling as a proportion of GDP by 2024/25. Proposals to reverse an increase in national insurance are expected to cost £13bn a year, while a cancellation of a corporation tax increase is expected to cost £17bn a year.
There are already concerns about a lack of transparency in Friday’s announcement. The Observer understands that the Treasury select committee will demand clarity on the funding of the package and the impact on existing fiscal rules, as well as raising fears about the lack of any independent costings. Kwarteng has not instructed the Office for Budget Responsibility (OBR) to produce an independent analysis alongside his announcement.
It has now emerged that Kwarteng could wait until the spring to hold his first full budget, meaning it could be months before the OBR is able to publish its assessment of his plans. It is expected Kwarteng will announce any new fiscal rules at that point. “The chancellor has been clear that the government is committed to reducing our debt-to-GDP ratio in the medium term,” said a source. “However, as you would expect, given the severity of the economic shocks we face
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