Why windfall taxes come at a great cost
Spectator (UK)Nov 02, 2022
On Monday, two UK government sources revealed that Chancellor of the Exchequer Jeremy Hunt seeks to fill a £50B ($57B) fiscal hole in the country's finances amid an upcoming November fiscal statement.
Sources from the Treasury claim that Hunt's draft proposal contains around £35B in public spending cuts and £25B in tax rises. Meanwhile, Cabinet Office Minister Oliver Dowden has acknowledged that there would be "difficult decisions" on both tax and spending.
There's no such thing as free money, and the UK cannot borrow forever. The reality is that Hunt has been tasked with having to find tens of billions of pounds. While the likes of increasing the windfall tax may sweeten the upcoming statement for some, it's clear that there are no pain-free options on the table as the UK finds itself with no other choice but to enter austerity.
Cutting spending and raising taxes will only sharpen Britain's economic pain and benefit the rich the most. In what would be economic suicide, it's clear that the Tories intend to repeat the same pattern that occurred in 2010, where the wealthy survive and those on middle and lower incomes face the brunt of Conservative policies.
There's an 85% chance that the UK will have a Labour government before June 2030, according to the Metaculus prediction community.