It’s a naked political bribe, obviously, and will do little to reverse the fiscal onslaught that Hunt and Rishi Sunak have unleashed in recent years. We should still celebrate, though. We won’t be getting another for a very long time.
The Tories are supposed to be the tax-cutting party, but it doesn’t feel that way today. Instead of cutting taxes, they’ve driven them to a 70-year high.
Hunt has frozen inheritance tax, slashed the annual capital gains tax (twice) and dividend tax exemption (twice), and hiked corporation tax for good measure.
Sunak and Hunt’s most brutal move, though, was to freeze income tax and National Insurance thresholds for four years. Then extend the freeze to six years.
This will cost taxpayers a fortune as wages rise but tax thresholds don’t.
By 2028, this will cost us a colossal £52billion a year, according to the Institute for Fiscal Studies.
It will create 6.5 million more basic rate income taxpayers and another 4.5 million more higher-rate taxpayers by 2027 than there were in 2020.
No wonder the Tories face the worst election defeat since Tony Blair’s Labour landslide in 1997.
Hunt did knock off 2p off National Insurance from January 6, in a move that will benefit 27million workers. But that doesn’t even begin to offset the damage inflicted by earlier raids.
It’s hardly surprising that the Tories appear to be heading for electoral wipeout. Hunt and Sunak have taken the party’s unique selling point, and trashed it.
It’s too late for Hunt to position himself as the taxpayer’s friend, by dishing up a few last-minute cuts in March. Voters aren’t stupid. We all know what he’s up to.
Also, I have to ask an unpopular question. Can we afford them? Really?
Ignore all the chatter about Hunt having £20billion worth of “wiggle room”. No he doesn’t. Not with the UK national debt standing at a terrifying £2.67trillion.
Unless we focus on paying that down, it will come back to bite us and sooner rather than later.
Hunt is using voters’ own money as a pre-electoral bribe. It will be a waste of time and money, because no one will thank him for it anyway.
It’s far too late for that.
There’s only one reason to celebrate a tax cut in March. That’s because it will be our chance to do so for a very long time.
READ MORE: Jeremy Hunt has ‘more wiggle room for big pre-election splash’
The nation’s finances are in a total mess. Even Labour leader Kier Starmer and his Shadow Chancellor Rachel Reeves can see that.
They had all sorts of fancy plans to pump money into pet projects like Starmer’s much-heralded £28billion green industrial revolution.
Won’t happen. The money’s been spent.
If Labour wins the election, any money Starmer and Reeves can rustle up will disappear on public services.
They won’t be thinking about tax cuts at all. It simply won’t be a priority (and the party’s left would do their nuts).
Even if by some miracle Sunak does win the election, he’s unlikely to offer any tax cuts in the early years of his new adminstration. He might throw us a bone before the next election, but that’s five years away.
So this is our last chance to celebrate a tax cut for some time. Hunt’s plans are cynical, unaffordable and inadequate, but it’s all we have. Enjoy.
