Kwarteng accused of bid to avoid scrutiny of £30bn tax cut package | Tax and spending

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 and the implementation of the energy price guarantee, we will assess whether the current fiscal rules work for the economy.”

Economists at the Institute for Government, the Resolution Foundation and the Institute for Fiscal Studies (IFS) have all questioned how the package could meet current fiscal rules. Paul Johnson, the director of the IFS, said: “If we’re getting permanent tax cuts on top of the slowing of the economy, then it’s hard to see how they meet the rules.”

Tory peer David Willetts also urged ministers to look at paying for the energy price cap, estimated to cost £100bn to £140bn, by increasing property taxes. “Even if the government simply says we’re going to borrow the money, that means we’re going to have to pay later,” he said. “Given the government is so focused on growth and mobility, increasing the taxes on earnings is less good than looking at ways in which property – which is less heavily taxed – makes a contribution as well.”

It also comes with another row brewing over the NHS, with suggestions that health secretary Thérèse Coffey could abolish or modify the four-hour target for patients to be seen at A&E. Sources close to Coffey said the measure would not be axed.

Patricia Marquis, the Royal College of Nursing’s director for England, said: “But ministers must be careful with their words and reassure both nursing staff and the public that their first priority is bringing wait times down.”

Vishal Sharma, chair of the BMA’s consultants committee, said scrapping the target “must not simply be a means of masking these long waiting times and crowding in A&E, particularly as this is associated with poorer patient outcomes”.

“The biggest challenge we face in improving patient care is the serious workforce crisis that is crippling the NHS,” he said. “While it is encouraging that the new health secretary sees this an important issue to address, it is essential that the government acts urgently to tackle this and implements the right solutions.

“They must start with reforming punitive pension taxation rules that is driving an exodus of highly skilled senior doctors. The BMA has been calling for this for years, but we have now reached crisis point and immediate steps must be taken before it is too late.”

Saffron Cordery, interim chief executive at NHS Providers, said: “The NHS has been working for some time on plans for new performance standards which will better map patients’ progress through urgent and emergency care. However, trust leaders are keen to ensure that any new measures build upon the NHS clinical review of standards and are meaningful for the public.”

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