By Conor Holohan, media campaign manager
When Rishi Sunak stood up to deliver his new year’s speech on Wednesday, many were crossing their fingers for some good news.
In particular, with energy bills and inflation eroding the salaries of hardworking families, many will have wanted to hear that the government had a plan. It will have brought relief then, that one of Sunak’s five key pledges was to cut inflation to half of the current rate.
It’s right that cutting inflation should be a major priority. Inflation is the ultimate stealth tax. We all feel the effects of it when we buy our weekly shopping, fill up our cars, or pay our energy bills.
But while controlling inflation is technically a job for the Bank of England, the taxman has a big impact on those things too. Right now, the chunk he takes is at a 70 year high, fuelling record levels of spending and yet failing to deliver good public services.
Clearly something is going badly wrong in public spending. Yet not once in his speech did the prime minister mention waste or inefficiencies, or say what he would do to reduce it. This was particularly bizarre, since he had also pledged to drive down the national debt. Without budget reductions or a crackdown on waste, how will he get debt under control?
The answer is that it’s austerity for taxpayers, who will have to cough up more to pay for the PM’s plans. No onus on Whitehall to get the cost of government crisis under control. Instead, civil servants can press on with book clubs and sessions on how to ‘decolonise the self.’
Among the prime minister’s other pledges was a promise to cut NHS waiting lists. This will be a priority for taxpayers, who pay through the nose for a good health service, but are fed up with the black hole of the NHS budget. It’s not acceptable that the money going into the health service keeps rising while waiting lists grow, letting down patients, staff and taxpayers alike.
Most frustratingly, while he gave a clear timeframe for dealing with these issues, on the question of tax, the PM offered very little. Although Sunak signalled that taxes would be brought down by the government “as soon as we can”, there was no time frame offered and no concrete pledges. As an aside, Reform UK launched their policy platform this week, with eye-catching proposals to lift the starting rate of income tax to £20,000.
But for the moment, the main parties seem more comfortable raising taxes. As councils of different political stripes across the country prepare to consider uncapped council tax rises for April, it’s likely that taxpayers will have to pay even more in local rates. Combined with the frozen income tax thresholds, almost every household will be facing a tax squeeze.
In contrast to Sunak, when the Labour leader took the stage a day later, he rightly argued that we cannot spend our way out of the problems facing hardworking families.
That much is clear. Far too often, governments throw good money after bad, believing that being seen to spend more means they are seen to care more. But there’s nothing caring or moral about spending more and more on broken services when it’s household budgets that have to bear the brunt.
Starmer went on to say that Labour would not be getting the “big government cheque book” out. But taxpayers will need to see the detail to be reassured that, under a Labour government, they wouldn’t be expected to dip their hands into their pockets again and again to prop up a bloated bureaucracy.
For Starmer’s welcome words to have real credibility, Labour needs to set out another path beyond the failed status quo.
So, as the days get longer and we move forward into 2023, there is cause for scepticism towards both of the major parties and their plans for tax and spend.
We’re told that one day the taxes will come down, but we’re not told when. We’re told that the big government cheque book will be put away, but we’re not told how. If our leaders want us to be inspired by their visions for the year ahead, taxpayers deserve better than that.