Budget: Rachel Reeves has left herself with very few political levers to pull to get hold of large sums of cash
In a classic piece of political understatement, a government source justified the coming £20bn rise in employer national insurance as “asking businesses to help out”.
This language of throwing a few quid in the collection pot belies the size of this tax hike.
It is huge. But that’s the point.
Having ruled out pushing up the big revenue raisers, Rachel Reeves has left herself with very few levers to pull to get hold of large sums of cash.
This move will be the largest tax rise in the budget, filling half of the £40bn the chancellor is trying to find.
The fact that national insurance is paid by businesses big and small increases the size of the net – meaning relatively small headline changes can yield big sums.
That’s also the downside though.
Groups representing small companies have already said this will make jobs harder to create and maintain.
So what of the politics?
At £20bn, the value of these tax rises mirrors almost exactly the cost of all 4p worth of cuts to employee national insurance pushed through by the last Tory government (with the support of Labour).
We’re essentially seeing a shift in the national insurance burden from workers to businesses.
But again, maybe that’s the point.
Analysis: Are Starmer and Reeves on the same page?
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Those with assets ‘not working people’
Much has been made of the fuzziness around Sir Keir Starmer’s attempts to define who the ‘working people’ are that he is seeking to protect from tax rises.
Government comms on the matter have been clunky.
But there’s also been something of a misreading of what that two-word phrase represents.
For some this has been a conscious and political choice.
Such as when one Tory MP suggested the prime minister believed anyone who owns a (tax-free) ISA doesn’t count as a working person.
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Will the chancellor’s fiscal plan work?
In fact, isn’t it more likely that the now fabled ‘working person’ was never meant as a technical definition, but rather a statement of political intent?
Consider these statements – reproduced here without endorsement – that Labour would like you to ingest:
If you’re among the 97% who doesn’t pay capital gains tax, we’re on your side.
If you’re among the 94% who doesn’t pay inheritance tax, we’re on your side.
Much has been made of Sir Keir’s definition of ‘working people’. Pic: PA
And yes, if you’re among the overwhelming majority of people whose biggest tax outlays are income tax, national insurance and VAT, we’re on your side too.
Set against that backdrop – even if we’re still unclear about who a ‘working person is’ – it becomes pretty obvious who the prime minister believes is not one.
And it’s a familiar and traditional Labour answer.
It’s the 1% as opposed to the 99%. The few, not the many. The rich rather than the poor.
But drawing a line like that when it comes to policy is harder.
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The modest-earning family with a few stocks and shares may wonder why they are now thrown in with the serial investors.
The small family-run bakery will ask why they are seeing their payroll taxes whacked up alongside the big corporates.
And economists will argue that business taxes like national insurance are always ultimately paid by workers eventually in the form of lower wages and fewer jobs.
Which leads us to what will likely be one of the central tensions in the budget.
The only solution to pay for public services in the long term is economic growth.
But can that growth be achieved when the interim funding fix relies on upping taxes on the rich and the private sector?
The chancellor will try to square that circle on Wednesday by announcing billions of pounds of extra investment borrowing.
But firms may still feel the government has bought them a fancy pair of trainers only to then break both their legs.
The crash involving a cargo ship and oil tanker off the East Yorkshire coast is bad news for the sea, fish and air in the area. What we don’t know yet is quite how bad it will be.
That depends on a few things – but the speed of the collision, clouds of filthy black smoke from the fires and the leaked fuel are certainly worrying.
Firstly, it matters what was on board those two massive vessels.
Follow live: Jet fuel spilling into sea after tanker collision
Analytics firm Vortexa estimates the 183m-long tanker was carrying about 130,000 barrels of jet fuel (kerosene), which is now leaking into the sea.
Jet fuel is not as sticky or viscous as heavier types of oil, thankfully, so it’s less likely to clog the feathers and fur of birds and seals. It can also be broken down by natural bacteria.
But it can still poison fish and kill animals and plants on the shoreline if it makes its way into the soil there.
The Marine Conservation Society has pointed out the site in the Humber estuary is close to some protected areas and is important for seabirds and harbour porpoises.
And both ships will have been powered by a dirtier, heavier kind of oil – likely marine gas oil or heavy fuel oil, though we don’t know the details yet.
Heavy fuel oil is nasty stuff.
Pic: Bartek Smialek/PA
Cheap, thick and tar-like, it can smother animals and is very dangerous if they consume it, and is extremely difficult to clean up. Let’s hope this isn’t creeping around the North Sea already.
We don’t know how much of either the jet fuel or the oil powering the ships has leaked, or how much will be burned off in the violent fires – which themselves are ploughing black smoke and filthy air pollution into the surrounding atmosphere.
And we don’t know for sure what was on the Solong cargo ship and if, or what, will go into the sea.
Cargo ship ‘had sodium cyanide on board’
It was carrying 15 containers of sodium cyanide among other cargo, according to a report from maritime data provider Lloyd’s List Intelligence.
The container vessel was also transporting an unknown quantity of alcohol, said the casualty report – an assessment of incidents at sea – citing a message from the local coastguard.
Plastic takes hundreds of years to break down, and potentially can choke or trap animals.
Many of us have seen that uncomfortable viral video of a turtle having a straw yanked out of its nose. Previous accidents on cargo ships have seen plastic Lego pieces wash up in Cornwall 25 years later.
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Secondly, the impact depends on the sea and weather conditions around it.
Things like the wind and currents affect how an oil spill spreads in the sea. Scientists can draw up computer models to simulate how the oil could behave.
Thirdly, it matters how quickly this is all tackled and then cleaned up, if necessary, and if it can be.
Usually the slower the response, the worse the impact.
The coastguard has said the incident “remains ongoing” and it has started assessing the “likely counter pollution response” that will be required.
Such a response might need the help of numerous public bodies: the government environment department, the transport department, the Environment Agency and the Maritime and Coastguard Agency.
So for now the best we can hope for – aside from the welfare of the people involved – is that not all the oil is spilled or burnt, that conditions are calm and that rescuers and those cleaning up can work swiftly.
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