There is something odd going on in the UK. The Conservatives continue to tell us that the best way to create jobs is to have a low tax economy. They call it Singapore on Thames.
Yet wait on, UK unemployment has fallen to its lowest level in nearly 50 years, standing at 3.5%. Great I hear you say. There are now more job vacancies than there are unemployed. These low taxes must have kicked in.
Yet quite the opposite, with the recent hike in National Insurance, Britain has its highest tax burden in nearly 70 years.
We have the lowest unemployment figures with the highest taxation. Go figure.
Of course it is not that simple, the economy never is and it is understandable that the chancellor is making hay over the jobs figures. But God invented economists to make astrologers look good. While nobody can predict the future, the runes are not looking good. The Office for National Statistics has provided evidence of a sharp fall in living standards. Inflation has hit 9% and wages, pensions and benefits are not keeping pace. The country is set for the largest overall fall in living standards since the 1950s, with real incomes falling by 3.1%.
The Bank of England may need to raise interest rates to curb inflation, threatening a recession and adding to people’s misery.
There is something fundamentally wrong with the economy. Food bank usage is at an all time high, the in-work poor have not gone away and prices are shooting up on the basics that people need. Yet this Chancellor and the Government follow their neoliberal mantra with zeel. It hasn’t worked in the past and it won’t work in the future. Low taxation leads to the rich getting richer and the poor getting poorer; it does nothing for inequality.
It’s clear, we don’t need low taxation to create jobs, what we need is fair taxation.