The Autumn Statement big lie – no more taxes

Well, who would have expected it? Hunt blamed the country’s current financial problems on Putin. Nothing to do with more than a decade of Tory mismanagement of the economy. Nothing to do with the disastrous Kwasi Kwarteng and Liz Truss budget which he has now all but reversed. Our low growth rate and our troubles are caused by anything other than the Tories. Of course, we have are weathering bitter storms but the Tories left us unprepared for those storms. Now we must all pay the price.

The big lie of this budget is that there have been no tax rises. Tax rates haven’t gone up but people will pay more tax.

The Office for Budget Responsibility (OBR) forecast makes grim reading. The UK’s inflation rate to be 9.1% this year and 7.4% next year, contributing to the squeeze on living standards. The UK is in recession and growth will slow.

Here are just a few points from today. There are many more.

Hunt recognised that a lot of people have left the labour force after Covid-19. A review of the reasons for this report by early next year. As if it were not obvious. People seeking better, less pressurised lives is clearly not what the Conservatives desire. And of course, no mention the impact that Brexit has had on labour supply – seasonal, permanent, skilled and unskilled being in short supply. There is to be a review of retirement age. Younger people can forget dreaming of getting away from the pressures of bosses and the rat race for a few years longer than they hoped.

The squeezed middle, already squeezed by soaring mortgage and other borrowing costs, will be squeezed further by the lowering of the threshold for 40% tax. This is a move that is not regressive but will hit people whose commitments are at their financial limits.

The freezing of the level at which the basic rate of tax kicks in on earnings has been frozen at £12,571. That is regressive. The National Living Wage is being increased to £10.42 an hour. Good news, although the costs will fall on employers and the tax incurred as people that will earn more than £12,571 will be collected by the government.

Council taxes are due to rise by up to 5% for unitary and county councils with responsibility for social care. This transfers some of the pain and political pressure of raising taxes from Westminster to town halls. But this won’t solve the financial crisis in local government. A council tax rise of 5% would raise around £1.4bn, however more deprived urban areas will raise much less than wealthier rural areas according to the Special Interest Group of Municipal Authorities (Sigoma) (£). Council tax would need to rise by 20 per cent to fund the current costs of social care and other budgetary pressures (£).

However, the Enterprise Zones beloved by Liz Truss have been abandoned, and the Green Book hints at a return to the long established entrepreneurial cluster model. Corporation tax will also rise as planned, though briefly abandoned.

Devolution deals are expected to be agreed with Suffolk, Cornwall, Norfolk and “a major authority in the north east of England”. Not York and North Yorkshire by any chance?

The government has recommitted to major infrastructure projects including Northern Powerhouse Rail and HS2. Will Esther McVey stick to her commitment to vote against tax rises because it didn’t cancel HS2? I very much doubt it. Because…

The big lie of this budget is that taxes haven’t gone up. Tax rates haven’t gone up, though they will for business next year. But personal allowances have been frozen and for higher earners they have gone down. These are tax rises by anyone’s bank account.

* Andy Boddington is a Lib Dem councillor in Shropshire. He blogs at andybodders.co.uk. He is Thursday editor of Lib Dem Voice.

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8 Comments

  • We must hammer home the message that this dire situation has been caused by Brexit and Tory mis management from Truss and co. Also any idea of tax cuts are dead as a platform. With public services falling apart and underpaying of staff tax cuts would be ridiculed.

  • I agree that Putin is to blame. Didn’t he finance Vote Leave through his little sidekick Nige.?

  • I feel sorry for those paid more than £1,000,000 per annum. It must be very stressful wondering what to do with all that money. Hunt should have relieved their stress by introducing a 50% tax rate for them. Oh, I forgot, those are the people who bankroll the Conservative party and need protection.

  • I haven’t heard the chancellor say taxes haven’t risen. Quite the contrary. The chancellor is right also to blame Putin. The disastrous mini budget certainly reduced the government’s wriggle room but not much else. Putin’s war has made the country (and the world, especially Europe) poorer. Of course “the middle” has to bear some of the cost. Yesterday’s statement could have come from Gordon Brown. Libdems may think they can win votes from the “squeezed middle” but I see no justification for the middle being protected.

  • Yes Putins war on Ukraine has caused much harm to the economies of the world but the UKs economy has been made markedly worse by the Brexit vote, a recent Gallop poll revealed that 56% of Britains wish we had never left the EU, something that should make some politicians search their conscience after the lies and half truths put forward by Brexiteers??

  • @Barry
    100%
    There may have been legitimate reasons for leaving the EU (though I’ve yet to come across one that is convincing) but it’s clear that disrupting our trading relationship with the EU was almost certainly not going to be made up with better arrangements around the globe.

  • Martin Gray 19th Nov '22 - 6:44am

    Russell…..
    Having canvassed considerably in 2016 . It was apparent that a significant number of voters wanted an end to FOM. Ultimately it facilitated Brexit.

  • @Murray
    Although fom was probably the main cause of Brexit, I suspect more people wanted fom. Furthermore, those who wanted the end of fom probably didn’t want its alternative/consequences (300k nhs workers short etc) either. They were lied to.

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