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DREW HENDRY: ‘Tax cuts’ to national insurance are a gimmick

By Drew Hendry

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Jeremy Hunt and the Red Box just prior to the Spring Statement.
Jeremy Hunt and the Red Box just prior to the Spring Statement.

In my budget response to the UK Chancellor, I highlighted the stark realities that are now further embedded into what is approaching two decades of austerity.

The ‘tax cuts’ to national insurance are a gimmick that only really helps those on over £50,000 per year and mean savage cuts to public services.

It’s evident that those earning up to £19,000-a-year are caught in a financial bind, with no relief in sight, thanks to frozen tax thresholds under the Chancellor’s move.

The Institute for Fiscal Studies noted that people working full-time on minimum wage are facing a net tax increase exceeding £200 and voiced concerns that both the Tories and Labour are engaged in “a conspiracy of silence” over the effects on public services. Many councils in England are now in special measures, effectively bankrupt.

At the heart of my argument is the belief that fiscal policy is a matter of choice, not necessity.

The government, as highlighted by the Office for Budget Responsibility, has the freedom to craft its fiscal policies. Yet, the choices made thus far have led to adverse outcomes, marked by a series of economic setbacks and policy failures across multiple years, further exacerbated by the consequences of Brexit and other fiscal missteps.

Who can forget the rocketing interest rates and mortgages due to the infamous ‘Truss mini budget’?

The implications of these policy choices are far-reaching. Everyday people are grappling with soaring food prices, inflated by Brexit to over 25 per cent higher than just a couple of years ago.

Millions are facing steep increases in mortgage payments, and the burden of energy costs continues to climb, as evidenced every time they open a letter, an email, or an app to look at their account.

In Scotland we get ‘Barnet Consequentials’ for the bulk of our Scottish budget. It matters, directly to us that he has cut £19 billion from public spending.

The problem with consequentials is that it has consequences for what we can spend here. The Scottish capital budget has been cut by 10 per cent. That has an effect on plans for housing, hospitals and transport.

Finally, I am sure you join me in calling out the racist abuse Diane Abbott faced by a Tory donor. That she was then ignored an astonishing 46 times at PMQs, as colleagues discussed threats to her safety, is unforgivable. Representation fails us all when the voice of the first black, female MP is disregarded.

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