CHANCELLOR Kwasi Kwarteng has been accused of being “willing to gamble with fiscal sustainability” amid fears over his £45bn tax-cutting vision.

The stark warning from the director of the Institute for Fiscal Studies (IFS) came after Mr Kwarteng’s ‘mini budget’ sent the pound plummeting.

Sterling repeatedly fell to new 37-year lows against the dollar , slowly edging towards its all-time trough.

At its lowest point yesterday, £1 could buy just 1.0896 dollars – the worst exchange rate for Britons since 1985.

The radical measures include abolishing the 45% top tax rate for the super-rich in England, dropping the basic rate by 1p and ending the cap on bankers’s bonuses.

READ MORE: Nicola Sturgeon: Super-rich 'laughing all the way to the bank' after Kwasi Kwarteng's tax cut

Stamp duty has also been cut in England with nothing paid on the first £250,000 and for first time buyers that rises to £425,00.

Mr Kwarteng's changes will mean everyone earning more than £14,732 will pay more tax in Scotland than they would if they lived in England, without action by SNP ministers.

The strategy will require £70 billion of increased borrowing with the tax cuts costing up to £45 billion annually.

According to Treasury analysis, the Scottish Government will receive more than £460m as a result of the income tax cut, and around £170m of additional funding because of changes to stamp duty.

The Chancellor confirmed that the controversial rise in National Insurance contributions will be reversed, while a planned increase in UK-wide corporation tax from 19% to 25% in April next year has been cancelled.

The Chancellor stressed that the level of investment in health and social care will remain unchanged.

Mr Kwarteng also officially announced tightening to Universal Credit rules which will see people have their benefits cut if they do not fulfil job search commitments – with around 120,000 more people to be asked to act to seek more work.

Overseas visitors will benefit from VAT-free shopping while the cap on bankers’ bonuses will be scrapped.

Mr Kwarteng told MPs an increase in duty rates for beer, cider, wine and spirits would be cancelled.

Alongside an 18-month transitional measure for wine duty, he also said he would extend draught relief to smaller kegs to help support smaller breweries.

The so-called mini-budget was not very mini at all.

READ MORE: Mini-Budget: Chancellor abolishes top rate of tax in England

However, by describing it as a “fiscal event” Mr Kwarteng avoided the immediate scrutiny and forecasts of the Office for Budget Responsibility despite anger from MPs on all sides.

Speaking in the Commons, the Chancellor said his economic vision would “turn the vicious cycle of stagnation into a virtuous cycle of growth”.

Mr Kwarteng said the Treasury believed the borrowing to pay for the measures would cost around £60m for the first six months from October.

He said it was “entirely appropriate for the government to use our borrowing powers to fund temporary measures to support families and businesses”.

Mr Kwarteng told MPs: “For too long in this country, we have indulged in a fight over redistribution. Now, we need to focus on growth, not just how we tax and spend.

“We won’t apologise for managing the economy in a way that increases prosperity and living standards. Our entire focus is on making Britain more globally competitive – not losing out to our competitors abroad.

“The Prime Minister promised we would be a tax-cutting government.

"Today, we have cut stamp duty, we have allowed businesses to keep more of their own money to invest, to innovate, and to grow, we have cut income tax and national insurance for millions of workers, we are securing our place in a fiercely competitive global economy with lower rates of corporation tax and lower rates of personal tax.

“We promised to prioritise growth. We promised a new approach for a new era. We promised to release the enormous potential of this country. Our growth plan has delivered all those promises and more.”

But the IFS have issued a stinging analysis that Mr Kwarteng is “not just gambling on a new strategy”, but that “he is betting the house”.

IFS director Paul Johnson said: “Mr Kwarteng has shown himself willing to gamble with fiscal sustainability in order to push through these huge tax cuts.

“He is willing to shrug off the risks of inflation, and to invite significantly higher interest rates. Injecting demand into this high-inflation economy leaves the government pulling in the exact opposite direction to the Bank of England, who are likely to raise rates in response.

“Early signs are that the markets – who will have to lend the money required to plug the gap in the government’s fiscal plans – aren’t impressed. This is worrying.

“Government borrowing is set on an upward path. It will reach its third-highest peak since the war, and remain at well over £100 billion, even once the energy support package is withdrawn.

“And we heard nothing on public spending. It seems almost inconceivable that plans made last year, when inflation was expected to peak around 3%, will not need topping up at some point, unless the government is willing to allow a (further) deterioration in the range and quality of public services.

“Presumably this Government would borrow for that also. Mr Kwarteng is not just gambling on a new strategy, he is betting the house.”