As millions of families get ready to choose between starving and freezing, the biggest question in British politics right now is what government support is going to come in the next few months, and who exactly is going to get help. With Boris Johnson’s “out of office” on, and the current chancellor missing in action, it is left to the Tory leadership candidates to play at governing. On Sunday, the all but guaranteed victor, Liz Truss, announced she would “rush through” her £30bn worth of tax cuts six months earlier than planned, to “tackle the cost of living crisis”.
It doesn’t take an economist to realise that, far from “tackling the cost of living crisis”, introducing tax cuts is a dire way to target support: it just adds more cash to upper middle-class families’ pockets while the very poorest – many of whom pay little or no income tax – don’t benefit. Just look at the details of Truss’s £30bn cut: £19bn of it would go not to struggling families, but to businesses skirting corporation tax rises. Indeed, even Truss’s plan to scrap the national insurance rise would benefit the wealthiest: 85% of the £8bn cost would go to the top half of earners. It is Titanic economics, where the country is sinking and only the rich get a life raft.
