Fears are mounting about looming tax hikes for Brits after Rachel Reeves raided pensioners and warned of pain to come in the Budget.
The Chancellor has been defending her remarkable political gamble after declaring the Tories had left a £22 billion black hole in the finances.
She used the accusation as cover to virtually tear up Labour’s election platform—stripping winter fuel payments from 10 million pensioners, ditching the long-awaited social care cap and shelving major road projects.
Pundits pointed out that almost half of the alleged funding gap was down to Ms Reeves choosing to ‘cave in’ to union demands for public sector pay increases, with an eye-watering 22 percent over two years for striking junior doctors and 5 percent for many other workers.
Nevertheless, the Treasury review showed that even after the emergency action, Ms Reeves, there is still a £16.4 billion gulf in the books.
Keir Starmer has ruled out modifications to the main income tax rates, national insurance, and VAT.
The Labour manifesto dedicated itself to scrapping non-dom status, adding VAT to private school costs and raising stamp duty on buyers from abroad.
However, that was offset by additional spending, with the party calculating they would bring in £2.5 billion by 2028.
Another opportunity to bring in money could be inheritance tax. The Treasury’s ‘ready reckoner’ suggests that improving the headline IHT rate from 40 percent to 45 per cent could bring in an additional £1 billion.
She could come under pressure to clobber more than 30 million drivers to help fill the void, potentially by allowing the 5p fuel duty cut to expire next March.
The reduction was introduced in March 2022 by then-Chancellor Rishi Sunak to reduce the cost-of-living burden on families amid skyrocketing oil costs.
Though costs at the petrol pumps have since dropped greatly. Ms Reeves could look at restoring the link between duty and inflation in the coming years.
The previous Tory government froze the Fuel Duty Escalator for 14 years, meaning the levy stayed at 57.95p a litre between 2011 and 2022 and has been 52.95p since the 5p cut.
Research indicates the subsequent freezes have been worth at least £80 billion to motorists collectively.
Reversing the 5p cut and allowing the Escalator to increase with inflation would add around £100 to the annual fuel bill of the average motorist, of which there are about 33 million in the UK.
Hopefully, Labour will be able to fill that black hole, and then we should be able to get back on track. We might have to suffer for a while but once Labour fills that void they can hopefully bring back the things they would have axed for the time being. It was the Tories who created this situation, and it’s going to be a rough ride for a while.
It will look like less Robin Hood and more Robbing Reeves, but they have a difficult job, and it’s not going to be easy. However, targeting pensioners is not the way to go about it. Target the rich instead, they can afford it!
Many pensioners suffer during the freezing winter months and have to choose whether to heat or eat and they need both!
It does make one think about spending money, particularly on the fun things in life. Which, of course, you are entitled to do. It’s money that you earn, but later on in life, you’re not going to be looked after. If you’re over 50 years old, can’t work and are not of childbearing years, the state doesn’t give a damn about you because you’re not profitable anymore, and of course, it’s all about making money.
The thing that bugs me, and presumably everyone else is that most politicians don’t do what they say they’re going to do, so why do politicians break their promises?
Not all politicians are bad people or chronic fibbers, but they are good old-fashioned bullshitters.
I don’t think that politicians lie on purpose. I believe that they mostly articulate with the best of intentions. They believe what they say when they say it, but then things go amiss.
They want to deliver what they promise, but they fail to deliver, and not always their fault, and that is what makes the public disillusioned. The absence of delivery and the lack of ability to deliver on their promises.
Sadly, some people vote tribally, but some people do read party manifestos like myself and make informed decisions founded on what the party put out in their manifesto. Have you noticed that politicians also like to use the word ‘pledge’ instead of ‘promise.’
When people hear the word ‘promise’ they really do believe that politicians will fulfil the duties that they promised, but when they say ‘pledge’ it doesn’t sound the same, and let’s face it, if they started saying ‘I promise’ and didn’t deliver, they would look so much worse.
Elections are usually descended into an auction of undeliverable or utopian promises, and it’s extremely tempting for politicians to play the auction of bullshit. Some know they’re talking bullshit and see it as a means to an end, some don’t and suffer the electoral consequences.
Is it the voter’s fault? Maybe it’s the media’s fault. Perhaps voters should be more pragmatic in their expectations and not believe what politicians promise them, I don’t. Either way, it’s all bullshit!
THE MONTHLY MOSQUITO 