Today’s Budget sees borrowing increased by billions of pounds, inflation busting handouts for the public sector, Britain’s poorest pensioners squeezed, welfare spending out of control, rather than being reformed and a spree of tax rises, which they promised the working people of this country they would not do. This budget will harm working people, as well as damaging businesses and our local high streets. There were increases in National Insurance, Capital gains tax, Inheritance tax, Energy taxes, Air Passenger Duty, Businesses rates, First time buyer stamp duty and a fresh Pensions tax. In all, the amount of extra tax is £40 billion- the largest ever tax raising budget in history.
As a resident of West Sussex, I am profoundly disheartened by the confirmation of the cancellation of the long-awaited A27 improvement scheme. This decision represents a significant setback with impact across the county from the congestion and displaced traffic. The A27 is a vital artery for our daily commutes and local economy. It only reinforces concerns that the Government is indifferent to the needs of rural areas and their infrastructure. Despite its cancellation, the Chancellor talked about ‘Investment, investment, investment’ which seems contradictory, given that it was set out in the same budget includes significant rail fare increases. These rail hikes now mean that all forms of rural travel will become more difficult and expensive. It is clear from the actions of this Government that they do not understand or care about rural Britain and the unique challenges that face countryside residents. Changes to inheritance taxes levying them on agricultural and business property for the first time will hurt family farmers passing their business on to their children, leading to the loss of generational knowledge and traditions that have sustained South Downs farms for decades.
Alongside increased taxes, the Chancellor has also embarked upon an enormous borrowing spree, saddling our children and grandchildren with billions upon billions of pounds more debt. This move will drive up interest rates, increasing our economy’s vulnerability to future shocks. Consequently, the OBR now predicts higher inflation across all their forecasts.
Before they were elected the leaders of the current government assured the public that their plans were fully costed and did not necessitate any further tax increases. They pledged not to raise national insurance in any form. But today, the Government has hiked employer national insurance contributions, a tax rise that will ultimately be felt by working people and costing thousands of jobs. Paul Johnson of the independent IFS has said of Labour’s tax rises: “somebody will pay for higher taxes – largely working people’. Even the Chancellor herself, in 2022, acknowledged that a rise in employers' National Insurance would hit businesses and working people.
Furthermore, thousands of grieving families in West Sussex will be forced to pay inheritance tax after the Chancellor announced a tax raid on private pensions. The average pension pot for a 55 to 64 year-old is £107,300, according to the Office for National Statistics (ONS). From 2027, inheritance tax will apply to private pensions, which are currently exempt from the death duty, resulting in potentially 40% going to the taxman. The Government said the move would affect around 50,660 families every year, culminating in higher taxes for those who have worked their whole lives to secure a comfortable retirement.
I was also incredibly disappointed not to see the Chancellor reverse the cancellation of the winter fuel payment for thousands of pensioners. This policy will significantly increase the challenges faced by pensioners, including those earning as little as £13,000 a year. In the face of huge increases in taxes and borrowing, it is an outrage that this cruel scheme was not restored.
The truth is that the British economy grew at the fastest rate in the G7 earlier this year, with the second-lowest debt as a percentage of GDP in the G7. Inflation was left at the target 2% level despite global pressures, and unemployment at 4% was half of what it was in 2010. Labour has no excuse for their actions. This budget is unnecessary, damaging, and will have significant consequences for rural communities and the British public.
