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Politics / Carmichael slams spring statement as ‘pretty thin gruel’

Federation of Small Businesses (FSB) says more should have been done to help its members in the Highlands and Islands

Isles MP speaking in parliament last week.

NORTHERN Isles MP Alistair Carmichael has accused Chancellor Rishi Sunak of presenting a spring budget that is giving with one hand while “snatching away with the other”.  

The Lib Dem politician labelled today’s announcement in the Commons as “sleight of hand in the face of a cost-of-living crisis”.

Sunak confirmed the expected mitigation of the national insurance contribution hike of 1.25 percentage points by raising the threshold for payments to £12,570 as well a 5p drop in fuel duty, the largest such cut ever.

There was also a suggestion that the basic rate of income tax may be cut by 1p in two years’ time.

Carmichael said in the light of the latest economic data with an inflation rate of 6.2 per cent, expected to rise to 7.4 per cent for the rest of the year, the measures announced fell short of what is required.

Meanwhile the Office of Budget Responsibility (OBR) is warning about the biggest annual fall in living standards since its records began.

“People listening to the Chancellor’s statement as a cost-of-living crisis looms large would be forgiven for asking ‘is this really it?’ the Orkney and Shetland MP said.

“The Chancellor spent time bragging about bringing borrowing down. Frankly, when households are facing their own personal costs going up and paying the price for government inaction, that brag will ring hollow.

“Families were looking to the Chancellor to offer them hope, but instead he has added to their struggles by hitting them with years of unfair taxes. The Chancellor seems to have recognised the folly of his unfair National Insurance hike by partially mitigating it – he should instead scrap the hike entirely.

“A cut to fuel duty will be important for islanders who rely heavily on cars facing soaring prices at the pump, but it is pretty thin gruel compared to the scale of the challenge.”

The change in fuel duty comes into force at 6pm today, but retailers have already warned that prices will not come down instantly.

Reduced fuel prices will only be implemented once petrol stations’ tanks have been re-filled with fuel sold to them by wholesalers at the lower price.

Carmichael added: “The government would have been better off looking at the fuel tax hikes he is imposing on businesses or bringing in an emergency cut to VAT, as Liberal Democrats have called for, which would put £600 back into the pockets of the average family.”

Highlands and Islands development manager at the Federation of Small Businesses (FSB), David Richardson, said some of the measures announced were beneficial to his clients but more should have been done.

“With fuel poverty in the Highlands & Islands perhaps the highest in the UK, everyone here is feeling the pinch, but it must be remembered that small businesses have none of the protections of households, nor the negotiating power of big businesses,” he said.

“In short, while beneficial, an opportunity was missed to bring real help to the countless small businesses currently being overwhelmed by massive energy price hikes. Action is still required on this front now, or we face witnessing some great businesses that struggled through the pandemic and survived, going to the wall just as things should have been getting better.”