The prime minister has asked his cabinet mates to come up with ideas to ease the cost-of-living crisis that is beginning to have a serious impact on household budgets. High energy costs will soon be joined by rising food prices as the effects of the war in Ukraine and recent lockdowns in China are felt around the world.
Department ministers are examining whether there is any targeted help that remains largely unclaimed and to which qualified individuals could be referred. This includes benefits such as pension credits. According to the DWP, up to £1.7 billion was unclaimed last year, equivalent to around £1,900 for each family entitled to living expenses support. Adoption is low because people don’t know about it or filling out forms is tedious. Access to social benefits is always associated with a daunting bureaucracy. Mr Johnson is also keen on reducing childcare costs.
But there’s an easier way to help people financially, and that’s to let them keep more of their own money. New figures show that even as the economy struggled to emerge from the pandemic, the Treasury was collecting more income taxes, Social Security, capital gains and estate taxes than at any time in history. HM Revenue & Customs took in £718.2bn, up almost a quarter on last year. Tax revenue as a percentage of GDP is now 30 percent, up from 27 percent last year.
The yield has risen every year since the Conservatives came to power under David Cameron’s coalition in 2010, apart from the fact that VAT was cut to 5 per cent to soften the impact of the lockdowns on the hardest-hit sectors of the economy. Middle-class professionals have borne the brunt of the so-called fiscal burden — being dragged into higher tax brackets by the freeze on tax allowances.
Under a Conservative government reportedly committed to low taxes, the overall burden is at an all-time high.
The Government has rightly identified the cost of living as a serious threat to the well-being of voters and hence to the Tory Party’s electoral prospects.
Instead of looking for ideas, Mr Johnson and Mr Sunak should look for the solution that is staring them in the face and cut taxes. The chancellor won’t have a budget until the fall, and if he announced cuts, they wouldn’t take effect until next spring. It will be too late, so an emergency kit is in order.
https://www.telegraph.co.uk/opinion/2022/04/26/real-cost-of-living-solution-tax-cuts/ The real cost-of-living solution is tax cuts