ASK ANYBODY in and around Westminster what the ‘story of 2022’ will be and it’s hardly surprising that most point not to Downing Street parties or the pandemic but the cost of living. The Tories are acutely aware of the pain coming down the road – Labour keen to capitalise.
Well, it’s already the story of the day. Average pay growth now lags inflation. Simply put, life is becoming more expensive. The damage not just to the recovery but to the public finances is obvious, and precious little is being done about it.
Indeed, the Conservative party is set to make it worse with impending tax increases. The increase in national insurance contributions coming down the track will be just as damaging to Brits’ finances as any other cost of living increase, and it is time for the government to cancel it.
The rationale behind the tax increase is weak at best; that the money is required, somehow, to keep the NHS ticking over. Even if that is the case, it is the symptom of a healthcare system that has grown inefficient, bloated and increasingly unmanageable. The health system has become a national religion and, as such, reform has become nigh on impossible.
Rather than take on a difficult job – perhaps using his majority, rather than contriving to lose it – Boris Johnson has elected simply to pass the hat around. For those who think this will be the last time the nation is asked to cough up just a little bit extra for the NHS, well, we have a bridge to sell you.
It is not too late for the government to reverse course on a damaging tax hike that will – once introduced – almost certainly not ever be reduced.
At precisely the time we need to give people the confidence to spend and businesses the time to invest, the Conservative government is set to dip its hand into the pockets of workers across the country.
Rishi Sunak is a popular Chancellor thanks to his efforts during the pandemic, but economists will not look kindly on a terribly timed tax raid.