MP for Bermondsey and Old Southwark Neil Coyle slammed the government’s mini-budget as “a giveaway for the very richest, paid for on a gamble”.
Announced yesterday (Friday, September 23), the budget signalled sweeping tax cuts and removed the cap on bankers’ bonuses.
Labour MPs have said the budget disproportionately benefits the wealthy and will saddle the next generation with huge debt from high borrowing.
In a written statement, Neil Coyle said: “Despite now looking to trash the previous six plans and breaking their own rules on borrowing, the Prime Minister and Chancellor voted through every single previous measure, taking the levels of tax in the UK to their highest point since the 1950s.
“Their plan to fix this high level of taxation does little to nothing to help those struggling right now, and I’m fearful that the next few months will be even tougher. Instead, it is a giveaway for the very richest, paid for on a gamble – which when it inevitably fails will fall on working families.”
Tax cuts include reducing the basic rate of income tax to 19 per cent from April 2023 and scrapping the 45 per cent higher rate of income tax.
The planned corporation tax rise from 19 to 25 per cent has been cancelled and the recent national insurance rise will be reversed from November.
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Neil Coyle continued: “Whilst I didn’t want to see people’s national insurance rise, and voted against it, the u-turn needs to be weighed against the cuts announced for the very richest.
“If you earn £25,000 you will get back roughly £280 – this won’t even cover the rising cost of living since it was introduced. Someone earning over £1 million a year will get back £54,000 – over double your working salary, for doing absolutely nothing!”
Thinktank The Resolution Foundation said the tax cuts would boost growth in the short-term but prompt a rise in interest rates and see an additional £411bn of borrowing over five years.
After the budget announcement, the pound fell by almost 2 per cent, trading close to $1.10 against the US dollar for the first time since 1985.
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Neil Coyle wrote: “The damage of this reckless plan started the moment the words left the Chancellor’s mouth, with our currency and markets dropping sharply. The levelling-up lie which voters were sold at the last election is now well and truly dead.”
He continued: “We already have the lowest levels of investment of any country in the G7 despite having the lowest level of corporation tax – I have no reason to believe not raising this as planned from 19% to 25% (which would still leave us with the lowest level) will do anything to encourage more investment.
“The reason for the lack of investment is blindingly clear for anyone who wants to see it, Brexit has made it difficult to impossible for businesses to operate here.”