Murphy warns against Tory ‘return to austerity’ after tax U-turn

There must be no return to austerity measures by the Government, Stormont Finance Minister Conor Murphy has warned.

Mr Murphy was responding following Chancellor Kwasi Kwarteng’s decision to abandon plans to abolish the top rate of income tax for the highest earners.

Mr Kwarteng said “it is clear that the abolition of the 45p tax rate has become a distraction”, adding “we get it, and we have listened”.

His U-turn came after several senior Tory MPs voiced their opposition to the plan, announced just 10 days ago in the mini-budget.

Sinn Fein minister Mr Murphy had been sharply critical of the mini-budget when it was delivered, accusing the Chancellor of “gambling” with public finances.

Responding to the Chancellor’s move on Monday, Mr Murphy said: “The decision to reverse this tax break for the super-wealthy is the right thing to do.

“Along with my counterparts in Scotland and Wales I have been calling for the immediate reversal of this indefensible decision.

“However a completely different approach is required if the Chancellor is to mitigate the economic turmoil created by his mini-budget.

“With no credible plan to fund his programme of tax cuts which largely benefit the well-off, there is a fear that there will be a return to austerity measures.

“That would only add to the hardship being faced by people and small businesses.”

Conservative Party Conference 2022
Chancellor of the Exchequer Kwasi Kwarteng speaking to the media ahead of the Conservative Party annual conference at the International Convention Centre in Birmingham (Aaron Chown/PA)

Mr Murphy added: “The Westminster Government should instead increase social security benefits to support low-income households with the higher costs they will face this winter.

“Public services are under huge pressure with rising prices, energy costs and the impact of inflation eroding available funding.

“Additional funding must be provided to enable continued delivery of public services, and a fair pay rise for public sector workers.

“The mini-budget is already set to increase mortgage costs for thousands of homeowners.

“A completely different approach must be adopted by the British Government if people are to keep their homes warm and if businesses are to keep their lights on.”