Hunt isn't too happy...
Chancellor Jeremy Hunt isn’t too happy that his budget hasn’t gone down as well as he would’ve hoped, as he lashed out at a BBC presenter for being called a ‘fiscal drag queen’.
Hunt, who delivered his budget yesterday, in what is likely to be the last budget, and possibly the final fiscal event before the general election later this year, prioritised tax cuts for the wealthy while doing very little to help those most in need.
The biggest announcement in his budget was the plan to cut national insurance by 2p, which is being portrayed as a pre-election giveaway.
However, the reductions in national insurance will disproportionately benefit the well-off, as highlighted by the New Economics Foundation (NEF), which has provided analysis showing that the richest households stand to gain 12 times more from the national insurance cut than the poorest.
The IFS also showed how little impact the national insurance cuts will have as a result of fiscal drag. In its analysis of the budget, it said yesterday: “Overall, for every £1 given back to workers (including the self-employed) by the NICs cuts, £1.30 will have been taken away due to threshold changes between 2021 and 2024, with this rising to £1.90 in 2027″.
In an interview with Radio 4′s Today programme, BBC presenter Amol Rajan told the chancellor that he had been called “the fiscal drag queen of UK politics” because of his policies.
Rajan told Hunt: “They call you the fiscal drag queen of British politics, don’t they? And with good reason, the net effect of your time in number 11 Is that taxes are still going up. It’s just not going up by as much as they were six months ago, but they’re still going up, aren’t they?”
Fiscal drag is when people end up paying more tax than before, because tax thresholds do not adjust in line with rising salaries and inflation.
The chancellor then replied: “You talked about fiscal drag. I don’t think I have been called a drag queen before by the way Amol.”
As the heated exchange between the pair continued, the Chancellor hit back: “I think the characterisation that you’ve just given of the British economy is unworthy of the BBC.”
Basit Mahmood is editor of Left Foot Forward
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