The Equalization Secretary has described the suggestion that the Chancellor’s mini-budget will be “trickle-down economics” as left-wing “nonsense”.
Simon Clarke made the comments ahead of a tax cut to be announced Friday.
The right-wing economic theory that tax cuts for corporations and high earners will allow benefits to “seep” into the pockets of the poorest has become political football this week as the prime minister pushes through tax cuts.
Though it has been dubbed a “mini” budget, Friday’s announcements are expected to be far-reaching. Despite this, the plans are not subject to the usual analysis of the Bureau of Budgetary Responsibility.
When asked about this, Clarke said the OBR had said it was too short to complete “the usual quality of analysis they would provide.” He later suggested it hadn’t been asked to do it, saying, “They will be asked to do that modeling in addition to the next events later in this fiscal year.”
The latest swipe at “trickle-down economy” comes after US President Joe Biden said he was “sick and tired” with the policy ahead of his first bilateral talks with Liz Truss in New York earlier this week. it “never worked”.
Clarke told Sky News shortly before the budget Friday morning: “This whole term trickle-down is such nonsense and is itself a centre-left misqualification of what this government stands for. We need to grow the economy because a more successful economy is good for everyone.”
The leveling secretary said he wanted to see growth back to pre-crash levels and Friday’s announcements would go well beyond the long-awaited repeal of the national insurance hike.
Clarke said the chancellor would say a more successful economy created a “virtuous circle” of more money going into public services.
Pat McFadden, the shadow chief of the Treasury Department, said the expected announcements weren’t really a growth plan.
“What it looks like today is the government is taking a huge gamble on public finances by taking a series of measures and putting everything on loans, calling it a growth plan,” he told BBC Breakfast.
McFadden reiterated Labor’s call for a new windfall tax on oil and gas companies and said the government does not appear to be trying to generate revenue.
“This isn’t really a growth plan, it’s a return to a very old-fashioned Tory policy, based on the belief that if you make those who are already rich even richer, it trickles down to the rest of us.”
He said the “flip-flops and chaos” posed a threat to stability, adding: “It will be the third change in national insurance in six months. It’s the legal equivalent of digging a hole and putting it back.” filling up.”
Clarke, who was previously Chief Secretary to the Treasury, also defended his decision to change his stance in support of a reversal of the surge in national insurance.
“I have served the government of that time and with a new Prime Minister come new privileges – but just to be clear, we are going to stand behind the investment in our NHS and social care that was announced as Prime Minister by Boris Johnson. We are just going to take it pay through general taxes rather than through a specific levy,” he told Sky News.