Money Matters

with Roger Downes of Andorran

Wrong call Rishi?

Last month we looked at the hike in energy prices that came in at the start of April. Whilst we were digesting the impact of that, the Chancellor was delivering his ‘spring statement’, alongside another increase in interest rates and the highest rate of inflation for more than a decade. We were all hoping for a helping hand from Rishi, but did we get it? I fear not.

The headline giveaway was an increase in the threshold at which we start to pay national insurance. The Chancellor says it will cost him £6 billion and it’s certainly a welcome measure. It will make lives easier in an accountant’s office for sure, but it doesn’t come in until July, by which time we will all have been paying the additional 1.25% levy that Rishi announced in November last year for three months. And that’s due to raise the Chancellor twice the amount every year that he’s giving away in his recent announcement.

He had the chance to scrap the 1.25% levy before it kicked in. That would have helped us all – employers, businesses, investors, pensioners alike – but Rishi chose not to, insisting it was being ring-fenced for the NHS. Don’t insult us, Mr Chancellor, we know that’s going straight into your treasure chest.

No help for businesses

The spring statement was much more notable for what it didn’t do than what it did. There was no help for businesses, who face spiralling energy costs in the way that households do, rising inflation, staff shortages and no more covid support, save for an extra £1,000 of employers’ NI. The hard-hit retail sector faces an increase in the VAT rate back to 20% at a time when we are hardly flocking back to shops and restaurants.

A couple of months ago, the government announced it was removing the triple lock on state pension increases this April because they would have increased by an ‘unfairly high’ 8%. Inflation will go beyond that in the next couple of months, so all those relying on state pension income will be worse off in real terms.

There was no help for those paying for childcare and student loan repayments were harder hit as a result of changes in what the Chancellor had in his printed statement but didn’t announce in the Commons.

I don’t want your job, Rishi, but I think you’ve probably made the wrong call here.

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