This cynical Budget is the last desperate attempt of a dying government
3 min read
Listening to the Chancellor make the Budget Statement, you’d be forgiven for thinking taxes were falling.
Delivering a cynical smoke and mirrors Budget, the Chancellor’s ruse was clear: give a pre-election bribe with one hand, take far more with the other, and borrow to cover the rest of the cost.
Oh, and hope we are all daft enough to fall for it.
Headlining the Budget was the Chancellor’s much-briefed two pence cut in National Insurance contributions (NIC), so that he could claim, erroneously, that taxes are falling. Trouble is, they are still going up.
Aside from tax cuts failing to cut tax, there was nothing to address the challenges our country faces
The personal tax cuts he trumpeted this week are completely drowned out by the huge tax increases he and his predecessor (the current Prime Minister) already announced. OBR documents reveal the truth: by 2027/8 the tax burden will still be rising and will reach its highest since the Second World War.
So how is he going to pay for his pre-election bribe? In three ways. First, adopting some Labour tax ideas like scrapping the non-dom tax status. Second, penciling in implausible real-terms departmental spending limits. Third, funding two-thirds of the cost with extra borrowing.
So two-thirds of the cost of his so-called tax cuts are funded by extra borrowing mimicking Liz Truss’s catastrophic mini budget.
The reality is the 0.9 per cent reduction in personal taxes produced by the NIC cut is immediately negated by the 1.3 per cent increase caused by previous threshold freezes.
Aside from tax cuts failing to cut tax, there was nothing to address the challenges our country faces.
We are in a recession with growth flatlining. The debt is 95 per cent of GDP up from 64.3 per cent in 2010. Trade is down 15 per cent and productivity is not improving.
Families in my Wallasey constituency are experiencing failing public services, record NHS waiting lists, soaring household bills and depressed wages, all set to the soundtrack of empty government rhetoric about the need for “long-term plans” as if they’ve forgotten who has been in power for 14 years.
If our economy had grown at the same rate as the rest of the OECD over the last ten years, it would today be £140bn larger and the average family would be £5,000 better off a year.
Instead, seven different chancellors have overseen stagnant growth, burgeoning government debt and 15 years of lost wage growth, with real-terms pay only now returning to 2008 levels.
Nationally, the government has delivered deepening levels of poverty as real-terms benefit cuts mix with poor wages to reduce the incomes of the poorest, and force 2.98 million to rely on foodbanks to make ends meet.
This Budget, likely the last fiscal event before the general election, was the Chancellor’s opportunity to scrape together something that might convince the public to give his discredited, failing and incompetent excuse for a government yet another chance.
But as voters head to the ballot box whenever the election comes, they will be angry that nothing works in Tory Britain; they can’t get a GP appointment or get seen at A&E. The rivers are full of sewage and the trains don’t work. They will be thinking of their ever-increasing rent and mortgage payments, and the crumbling schools their children are learning in, or that they can’t make ends meet on their stagnating wages.
This is a tired government running out of ideas and out of road. The Chancellor’s Budget did nothing plausible to change that.
Angela Eagle, Labour MP for Wallasey
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