The country is facing a severe cost of living crisis that has engulfed many families. The government’s response to this emergency has demonstrated a lack of any clear strategic vision. Boris Johnson has given households an eye-watering tax bill and offered a halfhearted rebate that is dwarfed in 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. The government asked workers to accept the inflation-related damage to their budgets.
This refusal by Boris Johnson to increase wages in line of inflation opens the door for 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. It is evident that not one government member has any idea of the pressures workers are under.
Families are being asked to pay more tax and accept lower pay, but the Prime Minister and the Chancellor have worked extremely hard to protect the interests and 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 the least, the government delayed the windfall oil and gas producer tax. Had this been brought in just a few months earlier, the Treasury would have received almost an extra £3 billion in revenue.
This litany of delays and cuts demonstrates what many people already know. This government is more concerned with protecting the profits of large banks, fossil fuel companies, multinationals, and large multinationals than supporting those who are facing the worst cost-of-living crisis for 70 years.
Families and high-street businesses should not be the first port of call when the government needs to raise revenues. Together with my Liberal Democrat colleagues in Parliament, I call for tax cuts that will reduce the burden on every household struggling just to make ends meet.
We need to reduce VAT from 20 to 17.5 per cent and put an average of £600 back in the pockets of every household in the UK. This would provide a vital boost to local high streets and help protect small businesses in the retail and hospitality industries.
This is what local high streets desperately need. The government has not done enough to help businesses pay their energy bills. This lack of support could be the final nail in many high streets’ coffins that are still recovering after the pandemic. If we want to prevent shops, pubs, and restaurants closing, we must challenge rising employment costs and unfair business rates, which make it more difficult to reinvest profits.
And that’s why we need real reforms rather than empty slogans. I have lobbied the Treasury to scrap business rates, and replace them by a Commercial Landowner Levy, which only captures land occupied commercially, rather than taxing buildings, machinery and other productive capital that fuels business. Simply put, this would save businesses money, which would allow them to reinvest their profits in struggling industries and help revive our high streets.
The government chose to tax small businesses and households with higher taxes while protecting its friends and putting off vital reforms. We are seeing that the Conservatives are no longer able to claim to be defending small businesses, working families, or those in the middle. This government needs to rethink its priorities, reduce taxes, and stop taking businesses and people for granted.