What a bumpy ride the chancellor is having. A self avowed Thatcherite he wants to preside over a low tax, low public sector economy, the much vaunted yet meaningless Singapore on Thames. He finds himself however, with one of the biggest tax rises in living memory and a huge expansion of public sector borrowing. Not that I am complaining too much about the latter.
It is odd however that it is said by some, that the best way to stimulate growth is to lower taxes yet as soon as the economy starts to wobble, either through a pandemic or the threat of war it is the public purse that is raided.
Anyway, back to the chancellor and the difficult tightrope he is walking. In yesterday’s spring statement, among other things, he has increased the threshold at which National Insurance is paid, despite putting NI levels up and he has reduced fuel duty by 5p a litre.
The former is smoke and mirrors as NI was completely the wrong way to raise money for social care and the NHS. The latter is out and out wrong and shows that this government is not serious about its commitment to Net Zero.
Fossil fuels need to be expensive to throttle demand and encourage more people to move to public transport or more efficient and reduced carbon travel means.
The people who are struggling with the so-called cost of living crisis are those that are poor. Shaving a few pance off a tank of petrol won’t make a difference to them in the medium or longer term. What they really need is a fairer distribution of the wealth that this country has. There is enough money in the UK so that nobody struggles with basics, it’s just in the wrong places.
We all may welcome a reduction in the price at the pumps but this is not what the country, or the world needs. Instead we need to wean ourselves off oil quickly and fairly. This will take a fairer approach to income distribution in this country. We don’t need cheap products, we need incomes to be able to afford the true cost of goods and services. This is where the chancellor should be focussed.