More than three months have passed since Halloween, but the British Economy Minister, Jeremy Hunt, yesterday dressed as a fairy godmother to – with the elections just around the corner – sell the British a tax reduction that is very much a mirage. , and pretend that they look the other way in the face of the extension of austerity that has turned the welfare state into a true skeleton.
The problem, however, is that the disguise does not suit him very well – one of a masochistic punisher would fit better in the context – and at this point the voters give the impression of not even listening to what the conservatives say, exhausted after fourteen consecutive years in power. To regain lost trust they would need not a magic wand, but a box of Borràs magic games.
Hunt, who stabilized the UK economy after Liz Truss’s disastrous libertarian experiment, has presented a budget – the last before the elections – with a further two point reduction in Social Security rates (from 10% to 8 %) and the elimination of the non dom (non-domiciled) status for foreigners who prefer to pay a fixed annual sum in taxes, instead of contributing for their entire global income. A bait for elections for which there is still no date (January 2025 at the latest but probably well before).
But only Cinderella’s fairy godmother is capable of turning a pumpkin into a carriage and mice into horses. Another thing is that the Tories manage to sell a tax cut when in reality they are the highest (according to the Office of Fiscal Responsibility) in eighty years, and present a low-growth economy as healthy (the forecast is 0.8% this year and 1.9% next), low productivity and low investment. And also a low unemployment rate, although only because almost ten million people of working age neither have nor are looking for work, six and a half million receive social subsidies, and two and a half million have permanent sick leave due to physical or mental health problems.
Hunt assures that each British worker will save around a thousand euros in taxes with the reduction in Social Security rates. But voters do not suck their thumb, and they realize that what the Government gives them on the one hand, it more than takes away on the other. And, by having frozen the minimum income at which one enters the band that pays the highest income tax, more and more people fall into the net. In this way, their salaries rise due to inflation, but almost everything goes to the Treasury.
Aware that the trick of pulling a rabbit out of the hat does not work very well, the Minister of Economy has robbed Labor of its promise to eliminate the non dom status of foreigners who take advantage of it, he has extended the extraordinary taxes to the profits of energy companies, and increased rates on airline tickets in premium and business class. In this way he claims to make money by financing the decrease in Social Security charges, and at the same time leaves the opposition offside. If the first thing Labor leader Keir Starmer did was raise the tax burden, the right-wing press would not take a second to brand him as wasteful and irresponsible, feeding a prejudice that voters already have.
In his attempt to put the best possible face on the storm, Hunt predicted that inflation will be below 2% before the end of the year, and the country is on track to achieve the goal of beginning to reduce inflation within five years. public debt (currently about 120 billion euros annually) as a percentage of GDP. But the price of this is the continuation of austerity and the cutting of the budgets of all ministries, except Health and Defense, with special punishment to Justice and Local Affairs despite the fact that many city councils are bankrupt, prisons are saturated and trials suffer from increasing delays.
Conservatives would need to be not the fairy godmother but the Pop Wizard so that people believe they see something different from the harsh reality. And neither Hunt nor Prime Minister Sunak look the part.
