Tax cuts 'for Southern millionaires' announced by the Government

Kwasi Kwarteng, yesterday set out a budget-in-all-but-name which signalled one of the biggest shifts in tax policy the country has seen.

The Chancellor, using more than £70bn of increased borrowing, set out a package which included abolishing the top rate of income tax, cutting stamp duty for homebuyers and brought forward a cut to the basic rate of income tax.

However, analysis by the Resolution Foundation found that the tax cuts meant that someone earning £200,000 will gain £5,220 a year, rising to £55,220 for someone earning £1m, while someone earning £20,000 will gain just £157.

This prompted senior Conservatives such as the Skipton MP and former cabinet minister, Julian Smith, to say that tax cuts for the rich “at a time of national crisis” for low income workers is “wrong”.

Scrapping the 45 per cent top rate of tax is set to cost £2.3bn this year, more than the amount that has been spent by the Levelling Up Fund so far, according to the Labour Party.

“This is a massive transfer of money from families in Yorkshire and our regions to the wealthiest people, who overwhelmingly live in London and the South East,” Lisa Nandy, Labour’s shadow levelling up secretary, told the Yorkshire Post.

“This country needs a serious plan to get jobs and investment into every nation and region, money back into people’s pockets and locally driven growth. Instead they’ve handed more money to millionaires than the whole North of England.”

Adam Hawksbee, the deputy director of the centre right Onward think tank, said there is a “real risk that this undermines levelling up” and that ministers need to make sure that they invest the proceeds of growth into the North.

“If they don't, the Government will pay a heavy political price,” he added.

It’s understood that the focus of levelling up under Boris Johnson has now shifted in an effort to encourage economic growth, with new “low-tax investment zones” set to be agreed with local authorities across the country, at least five of which could be in Yorkshire.

These zones include benefits such as reduced business rates, reduced burdens on businesses and slashing of planning regulations, in the hope that growth will help surrounding areas.

Writing for The Yorkshire Post today, the levelling up minister, Dehenna Davidson, said these zones were “levelling up in action”.

"Why can’t the next Silicon Valley be in Leeds? Why should the next life sciences hub not set up shop in Wakefield?,” she said, adding: “We want to give this region everything it needs to get on.”