Political gambles by Sunak have reached new highs with his action, or rather inaction, in helping households survive the cost of living crisis. Perpetuated largely by Central Banks, the inflationary crisis has plunged millions into poverty. Absolute poverty is set to rise – a first in decades, the largest fall in living standards since the 1950s; the chancellor has a crisis on his hands. Hence, Sunak’s approval has fallen faster than Bitcoin. Once poised to succeed Johnson and lead the Tories into the 2024 election, Dishy Rishi now lies behind Jeremy Hunt in the pecking order – the most unpopular Health minister in history. A host of policies and an aggressive marketing campaign, launched to save his political career amidst his wife’s tax status scandals, look unlikely to rescue families from the pinch on budgets. Criticism from Labour, including the economic-illiterate shadow chancellor, Rachel Reeves, on the cost of living crisis, contributed to the Tory party’s demise in the recent council election. Unable to spend his way out of this crisis, can the finance-fitty, ex-Goldman Sachs banker, help out this time?
Tax and spend liberal. This so-called ‘conservative’ chancellor not only recorded record deficits in 2020 and 2021 and became the only minister in the world to raise taxes during a cost of living crisis. Going ahead with the National Insurance tax rise of 1.25% for both employers and employees represents a disaster for the British economy. Having struggled to attract investment following the 2016 EU Referendum vote, the UK has lagged behind its European peers in each successive year following Brexit. Previously, Britain had topped the FDI charts in Europe every year following the Global Financial Crisis of 2008; thanks to the UK’s business-friendly environment during these years. Slashing corporate taxes from 28% to 19%, not ploughing ahead with former PM Gordon Brown’s planned NI hike – these are some of the many policies that made the UK the fastest growing economy in the G7 in 2014.
Rishi Sunak has increased taxes by more than any chancellor since records began in the 1970s
Not only has Sunak reversed these corporate tax reductions, raising the top rate to 25%, but he is also following in the steps of the failed former Prime Minister that presided in government leading up to the Great Recession in raising National Insurance contributions. In contrast, Macron slashed social security contributions totalling up to €20 billion annually for employers during his first three years as President; two years later, France recorded their lowest unemployment rate since the 1980s. Whilst European nations are slashing cumbersome, growth-stifling taxes in a drive to spur investment and growth, the UK takes the lonely path towards stagflation through hiking job-killing taxes due to political pressures from the loony-left and the economic ineptitude of the ex-PPE Oxford graduate chancellor himself.
Oil and gas companies have footed the blame for the rocketing energy bills in recent months. After all, giants such as Shell and Chevron recorded record profits in Q1. Labour’s Rachel Reeves suggested implementing a windfall tax on said firms to aid families in their current struggles. Well-intentioned but poorly thought-through; sums up most labour ideas from Miliband, Corbyn and Starmer. The current inflationary problems are due to a lack of supply relative to climbing demand. Additional production of oil, gas and renewable energies is needed to fight climbing energy bills – not more demand. Cutting into corporate profits will reduce investment in energy production which will drive down prices for consumers. Unfortunately, the far-left shadow chancellor is unable to comprehend this and Sunak will likely bend to increasing political pressures and implement such a disastrous tax rise on the energy companies that we need to step up the most.
The ‘energy rebate’ cannot go amiss when discussing Dishy Rishi’s economic failures. Offering low and middle incomes households the chance to save on energy bills, Sunak introduced a loan scheme by which households can offset £200 off energy bills this year and repay this sum over the next 3 years or so. This is utterly pathetic considering that energy bills in some cases are rising by over £2,000 annually. Not only is this a meagre figure, but it must be repaid in the future. Think of this policy as giving someone 50p to buy dinner, with this being a loan that must be paid back. Embarrassing.
Having been a successful student at Oxford, and a successful banker at Goldman Sachs, Rishi Sunak has failed in his role as Chancellor of the Exchequer. His handling of the cost of living crisis has been a total and unmitigated disaster; he has lost control of the public finances, lost the support of the public, and has even lost the support of many Tory backbenchers; even the Murdoch press has turned on the former Winchester College head-boy. A historic fall from grace, not seen since the days of Tony Blair. As David Cameron once said, ‘He was the future once.’