The leveling-up secretary has described the suggestion that the Chancellor’s mini-budget will be a ‘trickle down economy’ as left-wing ‘nonsense’.
Simon Clarke made the comments before a tax cut budget was announced on Friday.
The right-wing economic theory that cutting taxes for businesses and high earners will allow profits to ‘fall’ into the pockets of the poorest has become a political football this week as the Prime Minister imposes tax cuts taxes.
Although it’s been dubbed a “mini” budget, Friday’s announcements are expected to be far-reaching. Despite this, the plans have not been subject to the usual analysis of the Office of Budget Responsibility.
Asked about it, Clarke said the OBR said the notice was too short for him to complete “the usual quality of analysis they would offer”. He then implied that he was not asked to do so, saying, “They will be asked to do this modeling alongside subsequent events later in this exercise.”
The latest blow to the “trickle down economy” comes after US President Joe Biden said ahead of his first bilateral talks with Liz Truss in New York earlier this week that he was “sick and tired” of politics and that it had “never worked”.
Clarke said on Sky News shortly before the budget on Friday morning: ‘All this spin-off of the term is such nonsense and is in itself a centre-left misinterpretation of what this government is all about. We need to grow the economy because a more prosperous economy is good for everyone.
The upgrade secretary said he wanted to see growth return to pre-crash 2008 levels and that Friday’s announcements would go much further than the much-followed scrapping of the National Insurance hike.
Clarke said the Chancellor would say a more prosperous economy creates a “virtuous circle” of more funds going to public services.
Pat McFadden, the shadow chief secretary to the Treasury, said the expected announcements were not actually a plan for growth.
“What looks like today the government is taking a huge gamble with public finances by taking a series of measures and putting everything on borrowing, and calling it a plan for growth,” he said on BBC Breakfast.
McFadden reiterated Labour’s call for a new windfall tax on oil and gas companies and said the government appeared unwilling to raise revenue.
“It’s not really a plan for growth, it’s a return to very old conservative policies based on the belief that if you make those who are already rich even richer, it will ripple through to the rest of us. .”
He said ‘the flip-flop and chaos’ was a threat to stability, adding: ‘This will be the third national insurance change in six months. It’s the legislative equivalent of digging a hole and reseal again.
Clarke, who was previously chief secretary to the Treasury, also defended her decision to change her stance in favor of reversing the National Insurance hike.
“I served the government at the time and with a new Prime Minister comes new prerogatives – but to be clear we will support the investment in our NHS and social care which was announced by Boris Johnson as Prime Minister. We are just going to pay for it through general taxation rather than a specific levy,” he told Sky News.