Last Friday, the new Tory Chancellor set out his mini-budget. This was the first test of Liz Truss’ government. By the time the Chancellor sat down it was clear that she was not going to be on the side of working people, instead she protected the unexpected and enormous profits (estimated to be around £170 billion) of the oil and gas producers, one of whom she used to work for.
Instead of a windfall tax on those excess profits, she chose to ramp up the cost-of-living crisis with around £60 billion of government borrowing which will fall to be repaid by working people for many years to come. The cap on investment bankers’ bonuses was scrapped and so was the top rate of tax for those who earn over £155,000 and the rise in corporation tax reversed.
The reaction to the announcements was immediate. The pound tanked. The Bank of England had to step in to prevent pension funds collapsing, interest rates are rising, and mortgage providers withdrew hundreds of mortgage products from the market.
Liz Truss has crashed the economy by choosing to give enormous, unfunded tax cuts to those who earn the very most and to the richest companies, including the oil and gas producers! She has damaged the UK’s reputation and credibility for good.
For households across Cardiff Central and the UK, the cost-of-living crisis continues, and we will now have higher mortgage payments, higher rents, continuing eye-watering energy bills and all that government borrowing to repay. And for what? To give more to the very wealthiest people and companies.
The Conservative cost-of-living crisis has to be paid for. That’s why Labour would extend the windfall tax on oil and gas giants and scrap the proposed cut to corporation tax. We will reinstate the top rate of tax for the very wealthiest and reverse the cut to corporation tax.
We can’t carry on like this, lurching from crisis to crisis. The Prime Minister needs to stop prioritising saving face over saving people’s homes, recall parliament and reverse this disastrous, kamikaze budget now.
Only Labour has a plan to create jobs, slash energy bills and make UK energy secure, resilient, and independent from foreign dictators.