Cynical Tax Rises Creates War-Chest For Votes

By TruePublica: MPs yesterday passed a motion to scrap next month’s National Insurance rise – but Boris Johnson decided to ignore it because it isn’t binding. This is at best a cynical response as the overall intention is to allow household bills to rise and then over a period of time during the next twelve months, to relieve the pressure as we head towards the next general election.

This decision over policy is unnecessary given the circumstances but what it effectively does is affect those least able to cope the most and then use the same system in reverse to garner votes later on – without considering what is in the interest of seriously struggling household finances.

The overall deficit for 2021-22 looks likely to be around £20bn lower than the Budget estimate, economists say, which gives the government room for manoeuvre, since some of the revenue overshoot will continue into the coming financial year.

Last month, the treasury unexpectedly received billions more in tax receipts than expected – and yet the government has refused to ease the financial burden on households with a surge in taxes, inflation, energy and household basics such as food and clothing. A windfall tax on energy companies that have made well over £20billion more in profits than expected was also rejected.

Labour want the 1.25 percentage point increase in National Insurance, due to take effect from April 6, to be scrapped to “avoid making the cost of living crisis even worse than it already is”.

They warned it will cost families an average of £500 per year.

It is expected to raise £12 billion a year for health and social care services, but it breaks Prime Minister Mr Johnson’s 2019 election manifesto commitment not to raise taxes.

Tory ministers have also raised student loan repayment thresholds forcing many more to pay more.

Labour’s motion calling on the Government to cancel the rise was approved “on the nod” without a formal vote. It means it passed a Commons vote – but it is a non-binding proposal and will not compel ministers to act.

So bad is the cost of living crisis already that the boss of the budget supermarket Iceland, Richard Walker, made headlines recently when he said his stores were losing customers to food banks and hunger, amid rising food prices.

More than 31% of children in Britain were living in poverty in 2019/2020, up from 27% in 2013/14. But the latest data predates COVID-19 and the jump in costs, which charities say have tipped yet more families into hardship.

Even before the pandemic, the numbers in extreme poverty had soared. More than a million households, including 550,000 children, experienced destitution in 2019, up 35% since 2017, according to the Joseph Rowntree Foundation.

Britain, however, has seen significant cuts to social security in the last decade and is one of the world’s most expensive countries for childcare – and has implemented tax rises equalling that of the 1950s.

 

 

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