IN a few weeks’ time the Chancellor of the Exchequer will present his Budget to Parliament.
It is one of the big events in Parliament and the Commons will be full of MPs.
Indeed, as always, much of the media will be taking an interest – as should we all – as the announcements made in the Budget can have a significant impact on our own finances as well as that of the nation’s.
However, just as important as the day itself is the run-up.
The Chancellor will receive projections from the Office for Budget Responsibility (OBR) about the state of the British economy, and it is these projections that will give him the parameters within which to work.
He will also have consulted widely with many other interested parties to ensure he has views and ideas from a wide selection. This will include think tanks, lobby groups, and of course MPs. There will inevitably be great speculation in the media as to what the Chancellor may or may not announce.
For MPs it is one of the big opportunities to influence the Chancellor in a particular way or another. Of course, there will always be different views and ideas as to what the Chancellor should do, and the lead up to the Budget is always a cauldron of competing ideas.
The Chancellor (and this is true of all Chancellors) knows that his decisions are political as much as they are economic.
I have had my opportunity to make representations. My view at present is that individuals and families be allowed to keep as much of their income as possible. For various reasons – most especially to plug the hole left by the cost of Covid – the Government has continued a high tax policy in certain areas. I believe it is time to reverse this.
It should always be, as far as possible, up to the individuals to decide what they should do with their money. I believe this as a matter of principle, but also as a matter of practicality, as individuals make far better spending decisions than Governments.
Of course, we still need taxes to pay for public services, and it is vital that this is done as efficiently as possible and that we ensure that the services delivered by the public sector are done so in an effective and efficient way, eliminating as much waste as we can.
So, what would my specific asks for the upcoming Budget be?
I would hope that there be no change to taxes like inheritance tax either way, and that the Chancellor concentrates his efforts on National Insurance contributions.
National Insurance is effectively a job tax, and therefore any reductions would benefit those directly in work. The Chancellor has already indicated that this is a journey he is interested in given last year’s 2 per cent reduction in National Insurance from 12 per cent to 10 per cent.
I hope that he can find a way to build on this.
It is funny that one of the reasons we tax things like cigarettes and alcohol so much is to discourage people from using them – we should apply the same logic to employment, and get rid of as much of the job tax as possible!
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