On 6 March Jeremy Hunt delivered his Spring Budget. The Chancellor stood up in the House of Commons and said that those with the broadest shoulders should pay their fare share. Yet he delivered a cut and run budget, knowing his government is trailing in the polls with an election likely to take place later this year. The tax cuts delivered at the budget will spell more agony for public services in the coming years. This is the opposite of what our country needs.
One thing that came through really clearly is that despite the continued cost of living crisis, Jeremy Hunt didn’t offer up a serious plan to help people that need it most. Britain needs sensible and well thought out investment, yet what it got was limited pledges that don’t meet the challenges of our time. While it was good to hear that the NHS will get capital funding to update IT systems, it was a drop in the ocean compared to the scale of the challenge the NHS faces. The Chancellor’s tax cuts were an obvious attempt to try to entice voters with an election looming. Jeremy Hunt cut a further 2p from National Insurance on top of cuts announced last year. But these measures are poorly targeted and won’t provide enough help to those that need it most. The average worker will only benefit by £8 per week, a paltry figure compared to the drastic rise in energy bills, food and essentials in the last couple of years. The last time national insurance was cut, polling shows only 7% felt like it made a difference to their own finances. The wealthiest households will benefit disproportionately from these cuts. In our reaction to the Budget on TalkTV, Rachael made it clear that for an average of £8 extra a week today, the country will be served up public spending cuts in years to come. What this looks like right now isn’t exactly clear, but we do have some ideas. We know that some government departments have protected budgets like the NHS and education. However, other parts of government will likely have their spending slashed. This means less money for councils, stripped back fire and rescue services, and eroded access to legal aid and justice through the courts. Simply put, further cuts will make the UK less safe and less fair. The Chancellor did make a few positive announcements. He scrapped the non-dom tax break that allows some of the super-rich to pay very low levels of tax. This has been one of Tax Justice UK’s top policy recommendations. This move shows that fairer taxes on the rich are politically possible. It also shows that outside of taxes on the richest, the options are very limited - taxes on wealth are where any government is going to have to look to find urgent revenues. Extending the windfall tax on oil and gas excess profits was another positive step. Giving HMRC more resources to tackle tax dodging is a no-brainer. Recent research by TaxWatch shows that for every £1 invested in compliance returns £14. But these measures are a drop in the ocean compared to what our country needs and as Robert pointed out on GB News, people aren’t buying it. Both the government and opposition have decried the state of public finances. Making tax fairer so the super-rich and wealthiest companies pay more is a smart solution to raise revenue - and it is wildly popular. Tens of billions of pounds can be raised every single year with just a small number of changes that adjust the balance of tax paid by those with excess wealth. The government could go even further by closing down or reforming deeply unfair tax loopholes, and raise more revenue, creating a fairer tax system in the process. This could also go some way to building trust, resetting the balance so that those that get their income from work are on an equal footing to those that derive their income from wealth. As the Chancellor said, those with the broadest shoulders should pay their fair share. If they did, we can avoid deep public spending cuts, and could see this country working properly again. Comments are closed.
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