The economy and cost of living is dominating politics and everyday lives now and this week in Parliament we have been voting through various measures.
There are two immediate financial issues:
1 – Rising energy costs. As we (UK and pretty much every other country) all face the consequences of Russia’s aggression in Ukraine, impacting global supplies. We simply could not stand by and do nothing. We have brought forward various packages of support, worth £150bn – the largest in Europe. This was unplanned.
Opposition MP’s have supported these measures in Parliament.
2 – Global Economic Slowdown. The global economy is slowing, putting many countries either into recession, or at very real risk of a recession. The consequences would be significant job losses etc.
To stimulate the economy, we have set out a series of tax cuts (worth £440 for a typical person) and cancelled some planned tax increases, worth about £40bn. This was unplanned. Growth figures for the UK are now the strongest of all major economies, with this week’s employment figures delivered a record high. In North Swindon alone 965 more people are now in work in the last year alone.
The one area of disagreement was the removal of the 45p tax rate – (which amounted to £2bn of the £190bn spending) which has already been dropped.
Again, Opposition MP’s have supported these measures in Parliament, so no-one is saying do it differently.
More broadly there is concern about inflation and the £.
The markets (£) have been under pressure for some time now (pretty much the whole of 2022) as the $ (the main international currency) has been strengthening on the back of higher interest rates and significant cuts to public spending. This has impacted the £ and pretty much every other currency, ie the Euro, Yen etc.
If and I emphasise ‘if’ we only cared about the £, we would rapidly hike interest rates and cut public spending. Our unplanned £190bn spending is the opposite to this, with all MP’s accepting we need to both provide the immediate Energy Support and measures to help households and businesses.
It is a balancing act. We simply cannot stand by when households and businesses need our support. The markets will settle as we flesh our medium-term plans to balance public finances. A growing economy helps, with more people in work and businesses growing, more tax revenue will be generated.
These measures sit alongside our wider support for those most in need.
• Since 2010, 12,000 more people are in work in Swindon. A record high. • We have introduced the National Living Wage, for someone on full-time work this is worth an extra £4,200 per year. • We have removed the lowest 4.2m earners from paying Income Tax, worth an extra £1,200 per year. • We have cut the UC taper rate, worth an extra £2,000 per year. • Income inequality (despite what you often see quoted) has closed, with the lowest 1/5th earners and pensioners through the triple lock seeing the fastest increase in money.
Our relatively strong growth figures, record employment and quick decisive action on Energy Support etc give us the best chance to navigate these testing and challenging times for the economy at home and globally.
This matters - it is people’s jobs, income and opportunities. We will not flinch.
