The stamp duty cut announced by the UK government last month will do little to help first-time buyers on to the property ladder, according to Labour’s Shadow Culture Secretary Lucy Powell.

The now former chancellor Kwasi Kwarteng laid out plans to cut the property transaction tax as part of his flawed growth-focused fiscal package announcement last month. The move was designed to support first-time buyers in their efforts to get a foot on the housing ladder and support an increasingly fragile housing market.

The cut, which could save some buyers more than £10,000, would “support growth, increase confidence and help families aspiring to own their own home”, said Kwarteng.

Effective immediately, buyers in England and Northern Ireland pay no stamp duty on the first £250,000 of a property’s value — double the previous £125,000 threshold — and first-time buyers will pay no tax on the first £425,000, up from £300,000.

First-time buyers in London and the south-east could potentially save as much as £11,250 under the new measures, according to the government. Non-first-time buyers purchasing a house for £312,000 — the average price of a home in England according to the Land Registry — would save around £2,500, according to official estimates.

But these savings could be dwarfed by higher borrowing costs if the Bank of England seeks to offset the inflationary impact of the government’s tax cuts by raising interest rates.

Powell has accused the government of favouring rich landlords and homeowners with its planned tax changes, including stamp duty.

In an interview during Breakfast with Isabel Webster and Paul Hawkins on GB News, she said: “It’s not a case of cutting taxes for those at the top of society and hope that somehow that’s going to trickle down to growth for everybody else. That’s an experiment we’ve now endured for the last 30 years of running our economy and it’s not worked.

“And that’s what the government has been doing with their cuts to corporation tax, their initial plans to cut the top rate of tax, and also the cut in stamp duty, which we know will mainly benefit landlords and second homeowners.

“We have a very different approach to taxation, as well as a very different approach to running the economy.

“The most important thing now is that this government goes back to the drawing board, reverses its mini budget and tries to stem this absolute loss of confidence that we’re seeing in the British economy.”