- High taxes prevent growth
- Printing money causes inflation
- Trickle Down Doesn’t Work
*** Updated 24th Sept 2022***
Following the mini budget announcement on 23rd Sept 2022.
I am all for lower taxes, higher growth and smaller government. The issue however, the way I see it is that this mini budget has done nothing to help the lowest paid, nothing to help pensioners, nothing to help the hospitality industry.
The problem with ‘trickle down’ economics is that the money seldom trickles down. In reality, wealthier people don’t spend additional funds and thus help the economy and lower paid workers within it. What will happen is that people with spare cash will top up their investment portfolios, their pensions etc and very little will find it’s way into the real economy.
I would have preferred to see “trickle up” economics. We all know that people with money attract money, so giving it to them in the first instance as in the banker bailout for example, just ringfences that cash. Instead, if we put that money in the pockets of the barely managing, then they would spend the money in the economy, helping the larger economy. In the fullness of time that cash would end up in the same pockets as it has currently been assigned to, but the path it takes would prove of much greater benefit to us as a society.
Tax breaks for the highest paid, relaxing of banker bonus rules, stamp duty adjustments will make zero difference to the majority of hard working low paid people. Like the tax breaks for solar panel installations, it only benefits a few who don’t need the assistance, or not as much at any rate.
If you can’t afford food and heating, saving a few thousand on a house purchase you can’t even consider is worthless.
As a result of this mini budget, we are going to see pensioners freeze, the lowest paid and those on welfare going hungry and bankers getting bigger bonuses. Show me a poor banker? Show me a hungry banker? The problem with this is that in theory, as a result, bankers will pay more tax…. helping the economy.
In essence, bankers will pay more tax, allowing big government to get bigger, handing out more welfare payments.
We need an economy that works across the board, where jobs pay enough to not just live on, but provide a little extra for the odd luxury.
We are facing energy bills doubling this winter and some people are grateful! The oldest sales trick in the book, “tell people they will quadruple & they will be thankful they are ONLY doubling”, all because of a lack of planning and poor energy policy across the last 20 years.
This government isn’t interested in making your lives better, unless you already have a decent income and lifestyle. Tax breaks for tourists will butter few parsnips.
We could have helped the lowest paid by increasing tax thresholds, we could have helped small business and hospitality with a VAT cut. The same VAT cut that would help bring down inflation by reducing transportation costs.
***Updated June 2022***
Following a press release on 13th June, please click here to read The Reform UK Economic Recovery Plan
Our economy is under threat. We are currently subject to the highest taxes in peace time. The highest taxes in 70 years. Combined with the lowest growth for 60 years and galloping inflation, we are all being squeezed economically, the poorest hardest of all.
Whichever way you slice and dice it, we are one of the richest countries in the world, with millions of people having to choose between heating and eating. There have even been suggestions that we should spend 3 days a week working from home to save fuel and not use our cars on Sundays!
It makes you wonder what the world is coming to that we have reached this point? Only a couple of years ago, oil reached zero value, anyone with an oil tanker was being paid to store the stuff because half the developed world was locked down and no one was travelling anywhere.
How soon times change and the price too. Even when oil prices went briefly negative, the drop in value never presented at the pumps. Consumers didn’t get to see the price drop. We only get to see increases it seems.
While some of the cost of living rises are related to supply chains, demand and the Ukraine war, much of the increase is price gouging and opportunism. We have a lot to do to rebalance the economy and provide some stability for consumers.
Economy Tax Plans
If we are to recover economically following the Covid 19 Pandemic (and the present administrations reaction to it), we need a stimulus budget to drive the economy forwards.
Low tax, smart regulation, high growth. Higher growth will lead to better wages and increased tax revenues which in turn can then be invested into healthcare and our other public services.
By increasing tax thresholds we will lift 6 million people from paying income tax, putting an average of £30 per week into the pockets of the lowest paid. We will also lift around 1.2 million SMEs from paying corporation tax.
The result of these changes will add 1.5% growth to the UK economy for a first year cost of £48 Billion, leading to an increased tax take within 5 years of £50 Billion.
£30 per week is a significant sum for many people and would nake a big dent in their increased cost of living bills. This money would be the difference between feeding their families or having to make some horrible, tough choices.
Taxing the lowest paid with increased National Insurance contributions is not the answer to our economic problems. The UK needs growth so we can trade our way back to prosperity.
The current Tory administration are committed to high tax, big government, low growth. All they seem to want to do is to take ever increasing taxes from hard pressed workers. It maybe wouldn’t feel so bad if the money was being spent wisely, but so much is being wasted it just adds to the sense of anger and outrage.
The current government are out of touch with how tough life is for millions of people. The choice facing many people is whether to buy fuel to get to work to keep getting paid, but not enough to heat their home or feed their families.
This is unsustainable. We need a different way. There is a better way.
Because of the rise in fuel duty due to oil price rises in early 2022, the Government will receive an unexpected £100 Billion in taxes in 2022. We would return this in lower fuel taxes to aid the rising cost of living.
We would also scrap the 5% vat on fuel in the short to medium term as a further boost to help with the cost of living.
We would also pause the green tax on utility fuel bills, this is £153 per year per household, but will further help with the cost of living.
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We will fast track shale gas fracking. We have £2+ Trillion in Gas under our feet. Properly managed this could provide affordable gas for homeowners in the short to medium term while we move towards a sustainable future, as well as generating income for the nation to significantly pay down our national debt.
We also have large untapped gas fields in the North Sea. In the short to medium term we need to get the pumps running to provide a self sufficient supply of fuel until such time as renewables are a viable alternative.
Combined with our changes to the tax thresholds which will put £30 per week extra in the lowest paids pay packets, our strategy will allow people to get to work, heat their homes, afford food and provisions while the world economic volatility calms down.