Chancellor’s giveaway to the richest will leave us all paying the price

Danny Sriskandarajah, chief executive of the New Economics Foundation (NEF), said:

“We live in a country where homelessness has skyrocketed in the past year, families can’t afford their weekly shop, and our public services have been stripped to the bone. Yet today the chancellor chose to offer tax cuts which will benefit the richest fifth of households 12 times more than the poorest. And we will all pay for it through yet more cuts to our public services.

“The public do not want tax cuts, they want their kids to learn in schools which are not falling down. They want their loved ones to be able to get an operation without spending years on an NHS waiting list. It is worrying the so-called ​‘headroom’ the chancellor had today was used for tax cuts, rather than investing in vital services.

“To boost prosperity the government needs to change the current fiscal rules, which aren’t a good measure of safe levels of government borrowing. Raising taxes on the very wealthiest and borrowing sensibly would allow us to make smart investments in public services, supporting families and the green industries of the future.”

Lydia Prieg, head of economics at NEF, said:

“This is a levelling down tax cut. This government once claimed to want to ​‘level up’ the country. Yet today’s tax cuts will tear our regions and nations further apart.

“Combined with last autumn’s cuts to national insurance, the chancellor’s 2p cut today will cost the government £100bn over the next five years. This is more than double the amount that will be spent on levelling up the UK over 13 years.

“Cutting national insurance will see billions more for the richest households, meaning London and south-east England will, once again be the biggest beneficiaries while regions like north-east England get table scraps.

“If the chancellor decided to spend the money lost to national insurance cuts over the next five years on levelling up, they could treble the entire 13-year levelling up investment programme, focusing on getting the money to the regions who need it most.”

Alex Chapman, senior researcher at NEF, said:

“Freezing fuel duty for the 13th year will provide barely any help to households struggling to make ends meet – and instead puts our efforts to cut dangerous carbon emissions in jeopardy.

“Wealthier households, who tend to drive bigger cars and drive further, are the biggest winners from this. The freeze will lose the government vital money which could be spent on easing the cost of living and tackle carbon emissions at the same time – things like home insulations, cheap public transport and wind and solar power.”

ENDS

Contact
James Rush – james.rush@neweconomics.org, 07929 866591

Notes
The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.

We have counted the following funds as levelling up investment spending:

Towns Fund, Levelling Up Fund, UK Shared Prosperity Fund, funding for devolution deals, Long-Term Plan for Towns, Affordable Homes Programme, Housing Infrastructure Fund, Levelling Up Home Building Fund, Building Safety Fund, Education Investment Areas, Investment Zones, Freeports, funding for regeneration projects, Community Renewal Fund, funding for reviving historic high streets, funding for levelling up projects in the North West, Community Ownership Funds, and the levelling up announcements included in the budget today.