LONDON: Britain’s beleaguered government on Wednesday announced a fresh tax cut for millions of workers as it tries to win round voters before a general election expected this year.
In a budget update, finance minister Jeremy Hunt said the government would cut national insurance — a payrolls tax paid by employees and employers — by two percentage points from April, matching action he took in November. It remains to be seen whether the net fiscal giveaway, worth almost £14 billion ($18 billion) according to consultancy Capital Economics, would convince voters.
The right-wing Conservatives, led by Prime Minister Rishi Sunak, have been in power since 2010 but are badly trailing the main opposition Labour party in polls.
Analysts said the tax cut was modest, as elevated inflation forces up repayments on state borrowing, undermining the government’s ability to stimulate the recession-mired economy.
Labour leader Keir Starmer slammed the budget as “the last desperate act of a party that has failed”, describing tax cuts as a “Tory con” as Britons faced “the highest tax burden for 70 years”.
“Keeping taxes down matters to Conservatives in a way it never can for Labour,” Chancellor of the Exchequer Hunt told parliament in his budget address.
“Of course interest rates remain high as we bring down inflation, but because of the progress we have made... we can now help families not just with temporary cost-of-living support, but with permanent cuts in taxation.” The budget also featured plans for better value-for-money in public services, notably the cash-strapped National Health Service, and improved benefits for families with children. There were also tax rises, with Hunt unveiling a future levy on vaping, already the subject of a major crackdown by Sunak’s administration on public health grounds.
And he extended by a year, until 2029, a windfall tax on the profits of oil and gas companies, whose revenues have soared following the invasion of Ukraine by major fossil-fuels producer Russia.
Comments
Comments are closed.