The Conservatives have a choice – and they’re choosing to tax working people

Rishi Sunak has a critical moment in his Spring Statement tomorrow to do something about the toughest squeeze on living standards in a generation. With energy bills rising and about to soar, inflation already at its highest in decades, and the cost of the weekly shop going up and up, ever more people are struggling to make ends meet. The Chancellor needs to show he has listened and understood how serious this situation is. He needs to change course to support people across the country through the tough times ahead.

First of all, it is time for him to finally abandon his ill-timed and deeply unfair National Insurance tax rise on working people and businesses. When the government pushed this tax rise through parliament back in September, we immediately knew how unfair it would be. The government’s own assessment admitted that it would have an “impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce”.

We urged the government to think again and scrap the move then, but they refused do so. We said any tax rise should be borne by those with the broadest shoulders instead. And since then, the Chancellor has kept stubbornly refusing to think again, despite people facing mounting difficulties in making ends meet.

The impact on people is going to be stark. The average worker will see their annual tax bill rise by £342 from next month. What’s more, our analysis shows that private sector workers – including social care workers working through private firms – will face a ‘double whammy’, as most of the rise in employers’ National Insurance contributions to be passed on through lower wages too.

Tory MPs plead that there is no alternative, as this money is needed for the NHS and social care. It is true that the NHS and social care has been under-resourced for the last decade. But the truth is that they have chosen not to pursue alternative ways of raising the money from those with the broadest shoulders.

They are also ignoring the fact that higher-than-expected oil and gas receipts are already set to net the Chancellor an additional £12.2bn, while rising prices mean total VAT receipts could be up to £5.1bn higher than forecast. Those extra receipts show that the Chancellor could easily make different choices if he wanted to do so.

It might also be easier to listen to Tory MPs’ arguments if they had not wasted billions of pounds on unusable PPE that had to be literally burnt to get rid of it, and lost billions more to criminal gangs and fraudsters. It makes the Chancellor’s decision to raise tax on working people not only unpopular but unforgivable, as it comes in to fill a hole caused by waste and fraud.

The truth is, the Chancellor and the Conservatives have a choice. They are choosing to raise tax on working people at the worst possible time. They are also choosing to reject our plan for a one-off windfall tax on oil and gas producers’ profits to allow us to cut VAT on gas and electricity.

Our plan would give all households £200 off their bills, with the nine million households who are facing the toughest squeeze getting £600. That would almost entirely cancel out the energy price rise next month. It would be funded with a one-off windfall tax on the booming profits of oil and gas producers, who are benefitting from rising global prices. BP’s boss said they have “more cash than we know what to do with”.

Our plan would give people immediate help now, whilst our commitment to invest an extra £28bn a year this decade in climate adaptation would include insulating 19 million homes. That would cut our gas imports by 15% and lower home energy bills by up to £400.

We would prioritise energy security, by increasing onshore and offshore wind capacity, tripling solar power by 2030, backing tidal power, and ending the delay on nuclear power. Working with our energy unions, we would create a lower carbon economy with good, well-paid jobs. Our commitment to buy, make, and sell more in Britain means our businesses could help make these ambitions a reality.

That is the ambition and determination our country needs from the government. Not a Prime Minister who goes cap-in-hand from one dictator to the next trying to solve our energy crisis, nor a Chancellor who pushes ahead with a tax rise on working people at the worst possible time.

On Wednesday, the Chancellor has a choice. He can show he has now listened and understands the struggle that people are facing. This week, he must change course by finally halting the National Insurance hike, backing our one-off-windfall tax and energy plans, and making sure people have the help they need through the tough times ahead.