Yesterday at Labour’s first Budget of this Parliament they introduced £40 billion worth of tax rises. I’m worried for the hardworking people, families and businesses across Faversham and Mid Kent this will hit.
The Chancellor said it was going to be a budget for growth but it was the opposite. Don’t just take my word for it: the OBR revised down their growth forecast as a result of it.
Lots of people have contacted me anxious about what the Budget will mean for them or their business. That is why I’ve written this webpage covering some of decisions taken by the Chancellor.
I hope that you find it useful, and if you want more information or would like me to pass on any concerns to the Treasury please do get in touch.
Businesses and employment
Businesses are the backbone of communities, creating jobs and supporting economic growth. Yet in Labour’s first Budget the Chancellor introduced a raft of measures that make it harder for them to thrive.
Firstly, employers will face an increase in National Insurance Contributions from 13.8% to 15%, alongside a reduced threshold at which they’re due – falling from £9,100 to £5,000 a year. This means businesses will need to pay significantly more for each staff member they employ. Although there will be an increase in the employment allowance to help small employers reduce their total National Insurance Contributions bill, this will barely cushion the impact. I’m particularly concerned for the self-employed who will have to shoulder the increase without any employment allowance support.
The Minimum Wage is also set to increase by above-inflation levels to £12.21/hour. While higher wages are good in principle, this sharp increase – combined with the National Insurance Contributions changes – will push many businesses to breaking point. Many local employers in Faversham and Mid Kent, already struggling to cover costs, may be forced to either reduce their workforce, scale back hours, or pass these costs onto consumers, making everyday essentials more expensive for everyone.
The Budget’s disregard for the needs of small businesses, self-employed workers, and entrepreneurs makes me think the Government is out of touch with the reality of economic growth.
Cars, roads, and public transport
We live in a rural part of the country. Many people and businesses rely on cars or vans to get around. I campaigned with colleagues to urge the Chancellor not to hike fuel duty. The Conservatives froze or cut fuel duty every year for the last 14 years and I’m pleased to see the Chancellor has continued this approach with a fuel duty freeze for the next 12 months.
But I’m worried about public transport. We know buses are a lifeline for people without cars and for hundreds of kids to get to school. For the last year the Conservatives had fares capped at £2 which has been a great boost for local services, increasing passenger numbers by a fifth. But yesterday the Chancellor announced she’s increasing the fare cap by 50%. This could mean an extra £10 each week for people to get to work. On trains, fares are set to rise above inflation and the cost of many railcards will increase by £5.
Frustratingly, the Lower Thames Crossing is still delayed, and there was no update on the improvements needed at Brenley Corner. The Chancellor did announce more money for potholes, but £500 million is simply a drop in the ocean compared to the £16 billion needed.
Pensioners
I know how worried people have been about losing their Winter Fuel Payments – over 600 people signed my ‘Save Our Winter Fuel Payments’ petition or contacted me directly about it. I took this to the Chancellor to urge her to reconsider, but sadly she decided to go ahead with the cruel policy. I’m urging people to check to see if they are eligible for Pension Credit and to sign up if they are – please contact me if you need help with this. The Chancellor also introduced a new inheritance tax charge on pension funds.
I am pleased that the Government kept their manifesto commitment to maintain the Conservatives’ Triple Lock policy, which has meant the State pension has risen by £3,700 since 2010 in cash terms – £1,000 more than if it had been uprated under Labour’s plans since 2010. Sadly the Chancellor did not increase the personal allowance for pensioners in this Budget – something which every Conservative MP campaigned on at the General Election.
Farmers
Farming is an important part of our local economy. We’re home to fabulous fruit growers and hardworking arable and livestock farmers. I know the Conservative Government backed our farmers, but there’s been scarcely a mention of them from Keir Starmer since he became Prime Minister. The Chancellor has now cut Agricultural Property Relief which threatens thousands of family farms. Add to that the increase in National Insurance, the above-inflation rise in the Minimum Wage and higher fertiliser tax; this budget looks certain to make food more expensive. Farms aren’t just businesses; they are people’s homes and good farmers are custodians of our countryside. Farmers deserve more certainty, not new obstacles when they’re already under such financial pressure.
Pubs
Pubs are at the heart of communities up and down the country and we have some fantastic ones here in Faversham and Mid Kent. But many are struggling – especially village pubs like The White Horse and Queen’s Head in Boughton-under-Blean – so I urged the Chancellor to take action to support them. When I was Exchequer Secretary I introduced a lower alcohol duty rate on draught beer and cider purchased in pubs*. I welcome the Chancellor cutting draught duty by 1.7% – saving a penny off a pint.
*if you’re wondering why this doesn’t apply to other drinks in pubs, it’s because the risk of fraud was too high. It was only possible for draught drinks.
If the budget is going to hit you particularly hard, do please let me know. Although the Government has a big enough majority to win votes in Parliament without making concessions, I am hopeful that Ministers will still listen to MPs raising concerns.
