Jon Trickett MP responds to the Autumn Budget Statement
Jon Trickett MP writes: The right wing newspapers were cock-a-hoop after Jeremy Hunt announced large tax cuts for businesses and knocked 2p off national insurance tax. However, all is not as it seems.
Ministers have said that this was a Budget for working people, but this claim doesn’t stand up to scrutiny.
Firstly, the decision to continue the freeze of personal tax thresholds means that most workers will still be paying more tax than they were before the thresholds were frozen.
The average salary or income in Hemsworth constituency is £29,200, which is way below the national average. With wage increases needing to match food inflation, I calculated the result of today’s announcements for people on £29,200. The amount of income tax they pay will increase by £456, because the government has not increased the tax thresholds. This ‘fiscal drag’ will cost a worker on the average salary in my patch £9 a week.
When you factor in the reduction in national insurance of 2p this will still leave people in my constituency on the average salary more than £2 a week worse off. The Tories are giving with one hand then taking away with the other. It’s a con.
Secondly, the Chancellor forgot to mention that the Office of Budget Responsibility (OBR) has said that due to inflation the government’s budget requires £19 billion in additional expenditure to maintain our public services at their current level.
But the Chancellor has chosen to divert that money into tax cuts for businesses. This has left a significant budget black hole that can only be filled by huge public sector cuts in a few years time.
After 13 years of Tory government, our public services are on their knees. The capacity of our schools, hospitals and police service has been significantly reduced. The Resolution Foundation has said that the cuts that the government are proposing are “completely implausible”.
Perhaps this fresh wave of austerity has been planned by the Tories in expectation that they will no longer be in government to implement it.
Let me be clear. The Labour Party must make different choices if we are elected to government.
Growth in the economy is static. The OBR has said that working people are facing the worst cut in living standards since records began. The cost of food is increasing by ten per cent. People are living in increasingly difficult times.
It is simply unthinkable that in the face of this economic mess a government would seek to make even further public sector cuts.
The people I represent and the people of Britain as a whole are not fools. We might see today’s right-wing newspapers bellowing out a great triumph for the Conservative government, but people will look at their pay packets and crumbling public services and realise they are worse off.
We need a new approach. This should start with making sure working people are fairly rewarded, our public services are rebuilt and those with large amounts of wealth are taxed properly.