'Such measures do nothing to decrease the overall tax burden'

MP for Ellesmere Port

LIKE all consumers, my constituents are advised to read the small print before taking advantage of any supposedly good deal.

“The Devil lies in the details”, so goes the old adage and that is definitely how you should frame your approach to last week’s Autumn Statement on behalf of the Government.

Chancellor Jeremy Hunt’s headline portrayal of a measures including a 2p cut in National Insurance (NI) was “the biggest package of tax cuts since the 1980s”.

However, following a full scale read of the budget documents it emerged that the UK will still be taxed at record highs, while much-needed growth levels, already way too low after 13 years of this Government, are continuing on a downward spiral.

From the standpoint of the official Opposition, on the basis that everyone is already overtaxed – there have been 25 tax rises since 2019 would you believe? – we welcome the cut to NI, the boost to the national living wage and some tax incentives for business and self-employed people.

Such measures do nothing to decrease the overall tax burden on many British people who will still struggle against a backdrop of mortgage and energy price rises which will take effect as we approach a new year.

Add to the equation that, as things stand, that it will be 2028/29 before the freeze on income tax thresholds will be lifted – and that the Bank of England has said there will have to be a lot of hard work before inflation finally falls, estimated to be not before mid-2025, to the long-established recommended two per cent target – and you can see we are far away from where we need to be for the economy to start to thrive.

The decision not to increase income tax thresholds was imposed back in 2021 when Rishi Sunak was the Chancellor, meaning that workers in some instances are pulled into higher tax brackets and therefore pay more income tax. Normally those thresholds rise each year to recognise the impact of inflation, so freezing for such a long period is in effect another tax rise.

Also add to the mix that there was virtually no help offered to struggling local authorities, many of which have are either at, or nearing the point, at which they will have to declare themselves bankrupt and you can see what a mess we are in as a nation.

So Labour is preparing a plan to improve your living standards in the event, all being well, that we take back control at the next General Election.

Among those plans is one to cut your households bills by up to £3,000 a year over the next decade, £500 a year by insulating homes to make them more energy efficient; and £900 a year by building cheaper, cleaner power across the country through the creation of Great British Energy, a new, publicly-owned clean generation company.

There are a number of other policies that should help ease the financial burden on people which will be covered as we near the election. One side effect of the statement last week is that speculation has increased that the Tories will call an early election off the back of these tax cuts. I suspect they will have to do an awful lot more to be confident any election will go well for them.