Families urgently need a tax cut to tackle rising living costs
22 June 2022 12:49 PM

Families urgently need a tax cut to tackle rising living costs

22 June 2022

Faced with a faltering economy and soaring energy prices, the Chancellor has come before the nation and announced a battery of new tax measures. Mr Sunak claims these measures will get us back on track, but is digging into ordinary peoples’ pockets really the answer?

Families across the country are in the grip of a catastrophic cost of living crisis. The government’s response to this emergency has demonstrated a lack of any clear strategic vision. With one hand, Boris Johnson has handed households an eye-watering tax bill, while with the other he has offered a half-hearted rebate that is dwarfed by rising prices.

Even after the Chancellor’s support measures, the rise in National Insurance, the freeze on income tax thresholds, and increased energy bills will leave households £800 poorer this year. In just two months, the government’s policies have already cost families an average of £180 – all while 1,370 children are expected to fall into poverty each day, according to Resolution Foundation estimates.

Not content with raising the cost of living, Treasury Minister Simon Clarke recently asked workers to show “collective society-wide responsibility” and agree to low pay increases that will leave them poorer in real terms. Effectively, the government has asked working people to simply accept the damage caused to their budgets by rising inflation.

This refusal to increase wages in line with inflation paves the way for further economic disaster. By decreasing households’ spending power, Boris Johnson will reduce demand across the economy, starving struggling high streets of business, and driving the UK further towards a recession. Furthermore, it is clear, that not one member of the government has any real understanding of the pressure workers are under.

While families are being asked to both pay more in tax and accept pay cuts, the Prime Minister and Chancellor have worked exceptionally hard to protect the interests of big business.

In June of last year, the UK government pushed President Biden to drop the proposed global minimum corporation tax from 21 to 15 per cent, costing the taxpayer £6.8 billion a year. In the autumn, the Chancellor went on to hand big banks a tax cut that will cost the taxpayer £7 billion over the next four years. Last but not least, the government delayed the windfall tax on oil and gas producers. Had this been brought in just a few months earlier, the Treasury would have received almost an extra £3 billion in revenue.

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