Jeremy Hunt's Budget won't help tackle the countless crises Britain is facing — or prevent the predicted Tory collapse
What the Chancellor announced in his statement today will offer little reassurances to those who are struggling. Neither will it help his troubled party and the fate that looks set to come.
This was going to be the final Budget statement by a Chancellor of the Exchequer before this current parliamentary system ends and the holding of a general election takes place. More so, it was, probably, the final Budget statement delivered by Jeremy Hunt. But whatever the ifs, buts and maybes — and there are many of them — this statement and package of measures was not a winner, especially not as an election looms.
Yes, there’s the cut to National Insurance (NI) contributions of two pence from 12 to 10 per cent. And the two pence cut to NI for the self-employed from eight to six per cent. It is a tax cut at face value — but not exactly when looking underneath the surface at broader, long-term trends. But apart from one thing, to which I will return in a moment, there is very little to celebrate for hard-working Britons.
The blueprint published by the Office for Budget Responsibility (OBR) makes for grim reading. Even though the Chancellor and Prime Minister will claim to have cut people’s taxes today, the picture ahead is nothing but gloomy: according to the OBR outlook, “Tax as a share of GDP then rises gradually in every year of the forecast to 37.1 per cent of GDP in 2028-29, which would be the highest level since 1948.”
Millions more people face the prospect of being dragged into higher tax bands over the coming years and towards the end of this decade. The Tory paradox is complete: you can work hard; you can earn a better wage; and yet, still, you will pay significantly more in tax because of your efforts.
The narrative Tory MPs will discuss today is of the tax cuts announced; but the extortionate increases in council tax in some local authorities, the sluggish state of economic growth, and the millions of employees who will be dragged into higher tax bands will all contribute to the overall tax burden continuing to climb. That is the reality.
Yes, tax cuts are important; and we all want to see the level of taxation lower in an ideal world. But this is not such a time: we have millions of people in Britain who are unable to access a GP appointment, lack faith in the criminal justice system to put criminals where they belong, struggle to find the cash for childcare, have no chance of getting onto the housing ladder, and are losing patience (rightly) with being told that the country is heading in the right direction and turning a corner.
The thing the Chancellor got right, which I mentioned a moment ago, was his announcement that he would be abolishing the non-dom tax status. One of Labour’s proposals for a long time now, the Tories have long positioned themselves opposed to the abolition of it and yet, here we are. The Chancellor said in his statement today that it would raise £2.7 billion annually. But if only, as Sir Keir Starmer said in his Budget reply, the Tories had abolished this over two years ago, think of the money that could have been saved and put towards things to help the impending challenges facing the country such as, for example, obtaining a dental appointment. They have, of course, only done so — after years of opposing its abolition — because of a looming election.
And that — the election — is where the political and economic thinking lies behind all this. The Tories are desperate to claim to voters that, by cutting their taxes, they will be better off. But giving with one hand, and taking considerably more away with the other hand, will fool hardly anyone. They have been in charge for 14 years. They have governed this country through thick and thin. At the election, whenever it comes, they have to stand on that record. Before today’s Budget, things were not so rosy. The Chancellor’s Budget has scarcely changed that, for both the Tories and for the fracturing country over which they preside.