Paul Scully, the Conservative MP for Sutton and Cheam, has said he thinks the Chancellor’s decision to cut National Insurance was right to reward entrepreneurs, but he hopes the income tax thresholds will be raised.
Speaking to GB News he said: “If you think about what we’ve been through over the last fifteen years, we’ve been through three ‘once-in-a-century events, the financial crash, Covid, the war in Ukraine.
“We’ve had so much to contend with.
“When I was Minister for Small Business and hospitality and retail Minister, I was reacting to a lot of stuff. All the things Rishi was announcing when he was Chancellor, I was having to shovel out of the door.
“That’s £408 billion of business support: trying to protect jobs, trying to protect livelihoods, and businesses themselves. And clearly, that money’s got to come back in, you can’t magic up half a billion quid of support like that back into the economy immediately.
“ Of course there is an election coming but what’s been interesting is that budgets are clearly a choice. You have to pull one lever and in doing so, another lever gets pushed.
“What Jeremy Hunt has chosen, if you look at National Insurance, what that’s done is to give some reward to people who are self-employed. I used to be self-employed myself so I was asking the Chancellor to please make sure entrepreneurs in this country are rewarded for a bit of risk because that’s gone away from our tax system at the moment.
“Reducing National Insurance by two percent helps more people.
“I understand the argument about fiscal drag, I want those thresholds uprated at some point.
“Long term [people on modest wages are paying the higher rate of income tax] it is, absolutely. By dropping the National Insurance rate by two percent that employees pay they will benefit from that, so it actually affects a wider range of people than just the thresholds.
“if you look at why inflation’s been caused, it’s not the traditional overheating of the economy; we’ve got a stagflation at the moment. It’s because of energy costs, it’s because of a tight labour market and so we’ve got to do all those other measures about keeping people in work and getting more people back into work.
“We’ll see what we can get for NatWest and obviously only do that if that’s good value for money. It’s right that it goes fully back into private ownership rather than public ownership. But the business rates extension for hospitality gives the average pub about £12,800 extra a year.
