On Wednesday the Jeremy Hunt will deliver the last budget before the general election
Good morning. On Wednesday Jeremy Hunt, the chancellor, will deliver the last budget before the general election. As usual, there’s an expectation management process going on, influencing a lot (but not all) of the pre-budget reporting, but the political backdrop makes it more complicated than usual. The standard approach is to play down expectations in advance, so that when an unexpected tax cut or spending announcement comes out in the last five minutes of the speech, MPs and the media are surprised and impressed, and the coverage takes off on a cloud of positivity. But with the Conservative party still about 20 points behind in the polls (the latest figures are on the Guardian’s poll tracker), No 10 and the Treasury have been talking up the propect of tax cuts for months because that is the only way of holding off a Tory party mutiny. Hunt’s scope for giveaway measures is limited, but on his own side expectations are still high and the best reporting over the weekend and today suggests that 1p in the pound cut, almost certainly to national insurance rather than income tax, is already in the bag, and that a 2p cut might be a possibility.
This morning the New Economics Foundation has published research saying that if Hunt does cut national insurance in this manner, the richest households will benefit 12 times more than the poorest in cash terms. This is not a surprising or controversial assessment; much the same was said when Hunt cut national insurance by 2p in the pound in the autumn statement. But it is a point that has not received much attention in the debate in recent days, partly because Labour does not want to be seen as opposing a possible tax cut that would benefit ordinary workers.
If the chancellor announces a 1p cut to national insurance in this week’s budget, it will benefit the richest 20% of households 12 times more than poorest 20%, with those on the highest incomes receiving an additional £424 per year compared to £34 per year for those on the lowest.
It means £2bn of the £4.8bn tax cut will go to the wealthiest, while the poorest will benefit by just £160 million.
Everywhere you look, from our schools to hospitals to high streets, our country is falling apart at the seams while millions of people struggle to get by. Yet at the same time our chancellor is pushing for tax cuts that the country does not want, and that will benefit those who already have the most.
Not only will this reduce government income in the immediate future, but it will also worsen inequality making us all poorer and harming the country’s prospects.
Continue reading…On Wednesday the Jeremy Hunt will deliver the last budget before the general electionGood morning. On Wednesday Jeremy Hunt, the chancellor, will deliver the last budget before the general election. As usual, there’s an expectation management process going on, influencing a lot (but not all) of the pre-budget reporting, but the political backdrop makes it more complicated than usual. The standard approach is to play down expectations in advance, so that when an unexpected tax cut or spending announcement comes out in the last five minutes of the speech, MPs and the media are surprised and impressed, and the coverage takes off on a cloud of positivity. But with the Conservative party still about 20 points behind in the polls (the latest figures are on the Guardian’s poll tracker), No 10 and the Treasury have been talking up the propect of tax cuts for months because that is the only way of holding off a Tory party mutiny. Hunt’s scope for giveaway measures is limited, but on his own side expectations are still high and the best reporting over the weekend and today suggests that 1p in the pound cut, almost certainly to national insurance rather than income tax, is already in the bag, and that a 2p cut might be a possibility.This morning the New Economics Foundation has published research saying that if Hunt does cut national insurance in this manner, the richest households will benefit 12 times more than the poorest in cash terms. This is not a surprising or controversial assessment; much the same was said when Hunt cut national insurance by 2p in the pound in the autumn statement. But it is a point that has not received much attention in the debate in recent days, partly because Labour does not want to be seen as opposing a possible tax cut that would benefit ordinary workers.If the chancellor announces a 1p cut to national insurance in this week’s budget, it will benefit the richest 20% of households 12 times more than poorest 20%, with those on the highest incomes receiving an additional £424 per year compared to £34 per year for those on the lowest.It means £2bn of the £4.8bn tax cut will go to the wealthiest, while the poorest will benefit by just £160 million.Everywhere you look, from our schools to hospitals to high streets, our country is falling apart at the seams while millions of people struggle to get by. Yet at the same time our chancellor is pushing for tax cuts that the country does not want, and that will benefit those who already have the most.Not only will this reduce government income in the immediate future, but it will also worsen inequality making us all poorer and harming the country’s prospects. Continue reading…