They’re trying to hide something from you, you know.

According to Torsten Bell, over at the Resolution Foundation, there’s more to it than the winners – National Insurance payers – and losers – pensioners, landlords and pensioner-landlords.

Jeremy Hunt’s speech, he wrote, paints a picture of “a country that is somehow managing to combine higher taxes, crumbling public services and debt levels that are struggling to fall”.

He warned that “British politics is trying to generally gloss over this bigger picture pre-polling day, not least given the tax rises and spending cuts pencilled in to follow”.

Apparently the tax rises and spending cuts will be necessitated by the fact that Hunt has now splurged on two sets of tax cuts – now, and back in the Autumn.

Hidden in the details are the consequences: “£14 billion a year of lower debt interest was eaten up by lower tax receipts,” meaning Hunt – or any new Chancellor coming in after an election – will want to find a way to make up for that loss, probably with more taxes.

But they’ll then run into the problem of how to pay. The population is increasing rapidly – a fact that he didn’t dwell on in his speech, but one that may mean a million more people living here by the end of the decade and, yes, it’s due to immigration. This will mean more income for the Treasury, sure – but not an improvement in living standards as the amount people keep for themselves will not increase.

And there’s gloom over the number of us who are going to be too sick to work – due, again, to Tory political policies. “This knocks 0.5 per cent off employment, unwinding the GDP boost from a bigger population.” And it seems likely that a Tory or Labour government will simply try to deny sick people any state benefits in the hope that they’ll die off, as so many others have over the last 14 years.

With the economy in the doldrums, Hunt should have held off on more tax cuts – his whole package will cost £65 billion over the next five years. Instead, he picked Labour’s pocket – using two of the income streams Keir Starmer’s party intended to use to fund its own policies, if it wins an election.

So he scrapped the non-dom tax regime and extended the windfall tax on energy firms. That accounts for one-third of the tax cuts. The rest is being funded by borrowing, meaning that the Tories are once again marking themselves out as the party of financial IRresponsibility.

The National Insurance cuts may seem nice for employees – at the moment. But “£8 billion is being raised by the freezes to thresholds for employer NI… In time this will feed through into lower pay levels for employees.

“And then we come to the biggest group of losers: pensioners, who are already exempt from NI but affected by freezes to Income Tax thresholds. All eight million taxpaying pensioners will see their taxes increase, by an average of £1,000 – an £8 billion collective hit.”

Pensioners contain the largest remaining group of Conservative voters. This Writer wonders whether those Tories will continue to vote tribally in the face of this betrayal.

So does Torsten Bell: “This is the Conservative core vote losing out, as the next chart spells out. Whether this is an intentional choice to pivot towards those the Tories are struggling to win over, or a bit of an accident, is far from clear… It’s one hell of a political gamble.”

In fairness, though: “The focus on working-age employees reflects that they already pay higher rates of tax than pensioners or landlords. Furthermore, pensioners’ income growth has outstripped that of working households for some time.”

Now comes the burn.

“Personal tax increases combine with chunky rises in the corporation tax take (which is being sustained at its highest level this century) and wider economic changes to ensure this will be the greatest tax-raising Parliament since the Second World War. Tax relative to GDP is rising from 33.1 per cent in 2019-20 to 36.5 per cent in 2024-25 even with the pre-election tax cut rush.

“But the tax rises don’t stop on polling day. Highly unusually, £19 billion of tax rises have already been announced that will  come into effect after the election. So the tax take is set to rise further to 37.1 per cent in 2028-29 (the highest since 1948). The increase since 2019-20 amounts to £3,900 per household.

“Further tax rises are not all that is coming after the election. Even with loose fiscal rules, the tax cuts announced by Jeremy Hunt are only affordable by pencilling in major spending cuts to come. Real per-capita day-to-day spending for unprotected departments (think prisons, courts, FE colleges and local government) is set to fall by 13 per cent between 2024-25 and 2028-29 – equivalent to cuts of £19 billion and three-quarters (71 per cent) of the cuts inflicted on these departments in the first austerity parliament (2010-2015). The idea that such cuts can be delivered in the face of faltering public services is a fiscal fiction.

“More plausible, but deeply undesirable and damaging for growth, are plans to cut Public Sector Net Investment from 2.5 per cent today to 1.7 per cent of GDP by 2028-29 (a £26 billion decline). For too long Britain has been living off its past, rather than investing in its future. On current plans, we risk repeating this mistake in the decade ahead.”

The conclusion is scathing:

“The big picture for Britain has not changed at all. It remains a country where taxes are heading up not down, and one where incomes are stagnating. In fact, they are set to remain below their level at the last general election when voters return to the polls – the first time this has happened on record.

“Big tax cuts may or may not affect the outcome of that election, but the task for whoever wins is huge.

“Not only will they have to wrestle with implausible spending cuts, but they’ll also need to restart sustained economic growth – the only route to ending Britain’s stagnation.”

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