City AM – Missing: Hunt Budget fails to excite Westminster
London business newspaper CITY AM offers up its opinion on the Spring Budget.
Hunt’s tax cuts are just traps for Labour
Wednesday’s budget will be one of the last set pieces the Tories have to win back the British public ahead of the general election. Yet Hunt’s approach shows the difficult balance he must strike between the desires of the electorate, the fiscal realities and the backbenchers nervously looking at their own majorities. Unfortunately for him and his party, it seems unlikely that any of the measures will move the dial much.
Tory orthodoxy is of course that tax cuts drive their voters. This is the most likely rationale between the Chancellor’s two biggest giveaways – a reduction in National Insurance and a(nother) freeze on fuel duty. Both are taxes that hit ordinary working people and perhaps offer the greatest benefit for their fiscal cost. The problem is that the public isn’t listening.
Polling across the board shows that people are wary of tax cuts now. They can see their public services creaking and favour greater spending, not giveaways. Moreover, tax is low on the list of worries for those who are struggling. The average earner might be £40 a month better off now, and some dual income households will be better off thanks to the ironing out of the inconsistencies around Child Benefit thresholds. But it all pales in comparison with rising costs. Over the last couple of years, energy, rent, mortgages, childcare, food and almost everything else has surged. People are bristling at that more than taxes.
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