After the period of mourning, attention turns once again to the hardships facing many people in Britain today.
The Prime Minister and her new Chancellor, Kwasi Kwarteng, say tax cuts are the answer but I have my doubts. His decision to reverse National Insurance increases without any additional plans to support the NHS can only add to the chaos there and results in savings of £150 per month for those earning £108,000 but only 63 pence in the poorest 10% of households. That’s three million people.
Everyday we see cafes, hairdressers and a host of other small businesses going to the wall and people losing their jobs and livelihoods but the Chancellor, who is also the former Business Secretary, has given no details of any help for business. Even the support promised to domestic consumers, for rising energy bills, won’t kick in until bills have risen much further than under Labour’s proposals. And of course ordinary people will still foot the bill because the government is borrowing to fund it.
This week the Chancellor is planning a ‘fiscal event’. Most of us would call it an emergency budget but by changing the name Mr Kwarteng hopes to limit scrutiny. I doubt he’ll get away with that. He’s not only intent on reducing taxes for the better off and letting oil and gas giants enjoy obscene profits but he’s also planning to lift the cap on banker’s bonuses. They were introduced after the financial crisis of 2008 when irresponsible bankers almost destroyed the economy. Kwasi Kwarteng is of course a former banker.
Just how anyone believes these proposals are the answer is beyond me. He should use the underspend at the Department of Works and Pensions to target the million pensioners entitled to Pension Credit but not getting it and lower the threshold so more pensioners receive help. He could lift the cap on benefits rather than the cap for bankers. He might also raise corporation tax to the European average and ensure companies like Amazon pay a bit more tax in this country. That would be a fiscal event worth having.