Krishnan Guru-Murthy and Bim Afolami kept going round in circles while trying to dissect Jeremy Hunt’s new Budget last night.
The economic secretary to the Treasury maintained that the Conservatives were, in fact, cutting taxes after reducing National Insurance contributions.
However, Guru-Murthy kept bringing up one rather inconvenient truth: fiscal drag, where tax thresholds do not keep up with inflation and rising salaries.
Afolami began by saying taxes are high because of external factors. He said: “Since the last election, there are a couple of things that have happened.
“We spent over £4 billion on that. The difference between us and the opposition on that was that we have a credible path that we’re already delivering on to bring taxes down.”
He did not mention Brexit or the chaos triggered by Liz Truss’s mini-budget.
Guru-Murthy cut in: “The truth is, the tax burden is going up, has gone up, and is still going up. You may be reducing some taxes, but overall they’re going up.”
“No but we are bringing it down,” Afolami insisted.
Guru-Murthy said: “If you earn £35,000 a year, the net result of fiscal drag and the National Insurance cut is what, a few hundred pounds isn’t it? £500?”
“Well, that’s still quite a lot of money to a lot of people,” the minister said.
“What if you earn £25,000, you get nothing, do you?” the presenter asked.
“I don’t know the precise numbers for every single income bracket,” Afolami said, sounding frustrated – before saying child benefit changes would be substantial.
Guru-Murthy cut in again: “Isn’t it very cynical and easy to see through when you take two of Labour’s plans, particularly the non-dom idea, which up until this Budget you said was the wrong idea.
“Won’t voters look at that and say, ‘you’re just playing petty politics’?”
The non-dom tax status allowed people not based in the UK to avoid paying tax on any income they get from overseas.
Rishi Sunak’s wife faced significant backlash when it was revealed she enjoyed the tax loophole two years ago.
After the national outrage, she said she would pay UK taxes on her overseas income.
Hunt announced in his Budget that the government would be abolishing this status, despite previously standing by it.
As Guru-Murthy noted: “You said it was the wrong thing, and now you’re doing it!”
As the argument rumbled onto the National Insurance cuts and general spending, the minister said: “There’s no point in me saying that nothing can ever change in politics over the next five years, that wouldn’t be credible.”
“So why did the chancellor call these permanent tax cuts? They’re not permanent are they?” the presenter pressed.
“They are permanent,” Afolami claimed.
Guru-Murthy laughed, held up his hands and said once again: “You just said they’re not permanent!”