Chancellor’s Spring Statement – Orkney and Shetland’s MP responds

Orkney and Shetland MP, Alistair Carmichael, has responded to the Chancellor’s Spring Statement today. The statement included a partial mitigation of the Chancellor’s hike in National Insurance contributions by raising the threshold for payments, a 5p cut on fuel duty and a suggestion that the basic rate of income tax may be cut by 1p in two years’ time. Mr Carmichael labelled the announcements “sleight of hand” in the face of a cost-of-living crisis.

The UK economy is forecast to grow by 38% this year, according to the Office for Budget Responsibility, a sharp cut from its previous prediction of 6.0%. The annual inflation rate was 6.2% in February, and is likely to average 7.4% for the rest of this year

Mr Carmichael said:

“People listening to the Chancellor’s statement as a cost-of-living crisis looms large would be forgiven for asking ‘is this really it?’. People wanted to see real and immediate help on the essential costs they are facing like heating bills. Instead they got sleight of hand – giving with one hand while snatching away with the other.

“The Chancellor spent time bragging about bringing borrowing down. Frankly, when households are facing their own personal costs going up and paying the price for government inaction, that brag will ring hollow.

“Families were looking to the Chancellor to offer them hope, but instead he has added to their struggles by hitting them with years of unfair taxes. The Chancellor seems to have recognised the folly of his unfair National Insurance hike by partially mitigating it – he should instead scrap the hike entirely.

“Instead he wants credit for a promise to cut income taxes for working people not now, but in 2024. This isn’t ‘jam tomorrow’ – it is ‘jam in two years, subject to change’.

“A cut to fuel duty will be important for islanders who rely heavily on cars facing soaring prices at the pump but it is pretty thin gruel compared to the scale of the challenge. The government would have been better off looking at the fuel tax hikes he is imposing on businesses or bringing in an emergency cut to VAT, as Liberal Democrats have called for, which would put £600 back into the pockets of the average family.”

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