Nicola Sturgeon: Super wealthy will be laughing all the way to the bank

The super wealthy will be “laughing all the way to the actual bank”, Nicola Sturgeon has said, after the UK Government announced the biggest tax cuts in half a century.

Chancellor Kwasi Kwarteng abolished the top rate of income tax for the highest earners as he spent tens of billions of pounds in a “gamble” to drive up growth during a cost-of-living crisis.

In a so-called mini-budget axing the cap on bankers’ bonuses and adding restrictions to the welfare system, he argued that tax cuts are “central to solving the riddle of growth”.

Mr Kwarteng announced the scrapping of the top rate of income tax and a reduction of the basic rate to 19p in the pound from April.

Picture: Peter Summers/Getty Images

Income tax rates and bands are devolved to Scotland but the move will pile huge pressure on the Scottish Government amid a widening tax gap with the rest of the UK.

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.

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

Ms Sturgeon tweeted: “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.”

Deputy First Minister John Swinney said the Chancellor’s statement would provide “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”.

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

He said spiralling inflation meant the Scottish Government’s budget is worth £1.7 billion less than it was in December.

Mr Swinney added: “We are doing everything within our power to support people, public services and the economy, but these efforts are under threat by a reckless UK Government beginning a new, and dangerous race to the bottom.

"With a fixed Budget, and no scope to borrow for short term challenges, Scotland is at the mercy of UK decisions. This reinforces the urgent need for independence.”

Mr Kwarteng 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”.

He said: “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.

“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.”