So London fights the crisis

A maximum tax cut that amounted to about 50 billion euros, and which would be particularly favored by the wealthiest sections of the population. Among them, the city’s superbankers, whose bonuses will no longer be capped by what the European Union has imposed on Britain, like other member states, after taxpayers bailed out credit institutions during the global financial crisis. Now, with Brexit, London’s hands are no longer tied, and Finance Minister Quasi Quarteng has introduced A maneuver that would increase the country’s public debt and which has already attracted criticism from the opposition and the leaders of Scotland and Wales, who allege the tax cuts would cut services for the poorest.

The government of new Premier Liz Truss has sent the rigors of accounts dear to her party for the time being, considering a plan to control loads of energy bills over the next 6 months, in the form of public debt. Basement, Tories: According to the British Treasury’s first count, the United Kingdom should ask for a loan equivalent to about $265 billion to cover the maneuver called a “mini budget”.

In addition to the above moratorium on bonuses for bankers, Quarteng announced the abolition of the 45% tax rate for the highest income, which will increase to 40%. Then the increase in corporate tax is frozen which is kept at 19% instead of 25%. The 1.25 percent increase in payroll tax — or National Insurance — that was in effect at the beginning of the year will expire and be canceled from November 6. Stamp duty, a tax levied on the purchase of homes, is also deducted, providing for doubling the exemption limit for home changers to £250,000. The exemption limit for first home buyers will also be increased from £300,000 to £425,000. Finally, the increase in dividend tax rates, which was introduced in conjunction with the payroll tax hike, will expire in April 2023.

These are all measures that will benefit the highest earning Britons above all else. But that, according to Quarteng, will affect the entire economy in the long run, leading to more jobs and better wages. For example, a cap on bankers’ bonuses: “We need global banks to create jobs here, invest here and pay taxes here in London, not Paris, not Frankfurt and not New York”. , Quarteng explained to Parliament. “While the bonus cap has only raised bankers’ basic pay or pushed business out of Europe, it has never set a limit on total wages,” he said. In the background, the post-Brexit capital markets match between the UK and the EU: City does not want to lose its historical record, and faces competition from Amsterdam, Paris and Frankfurt.

But Quarteng’s moves, if on the one hand they appease the financial heart of London, on the other they risk increasing internal divisions in the country, especially between the central government and Scotland and Wales. “The super rich are laughing,” Scottish Prime Minister Nicole Sturgeon wrote on Twitter while commenting on the mini budget, “while a growing number of the rest of the population depend on food banks. All thanks to the incompetence and recklessness of this failed government. United of the Kingdom”. Welsh Premier Mark Drakeford called the move an injustice: “The UK government must provide vital support to those who need it most. Instead, they are cutting taxes on the rich, giving bonuses to bankers and Protecting staggering profits. Energy companies”. Also criticism of humanitarian organizations such as Save the Children, according to which the maneuver would be an “axe on the poorest families”.