Mid Cheshire’s Budget Response

The autumn statement will always resonate with me on a personal level. As my wife was waiting to give birth to our youngest son by C section, the Tories delivered the Kamikwaze budget. Two years later, Labour have now delivered a budget that is comparatively better, but it could have been bolder.

The very hospital where both our children were born, Leighton, can expect its repair programme to be protected, which is excellent news. The Liberal Democrats also welcome the huge increases in both day to day and capital spending for our NHS. A £3bn increase in the latter is a lofty sum and we hope that the new Leighton Hospital programme is a by product of that investment.

However, we cannot ignore Labour’s indifference to the elephant in the room that threatens to undermine their forthcoming NHS 10 year plan. The crisis of adult social care needs to be prioritised to the same degree as Labour’s emphasis on investment in capital projects. Despite that, we are very grateful that the Government has listened to our party leader and champion for carers, Sir Ed Davey. The increase to the carer’s allowance threshold is a huge relief to struggling families, but the scandal of HMRC demanding repayments from carers does not require an independent review. It requires appropriate redress and for any associated fines and criminal convictions applied unfairly to those carers to be quashed.

I expected Labour to extend the freeze to income tax thresholds and to increase fuel duty. I’m glad they didn’t as these definitely would have amounted to tax increases for working people. As predicted, the tax burden has increased for businesses, but the contributions now expected by small business could be catastrophic for growth. Halving the secondary allowance, combined with the NICs increase to 15%, could discourage entrepreneurs from creating the extra jobs we so desperately need to drive economic growth.

That could explain the Office For Budget Responsibility’s (OBR) anaemic growth predictions of roughly 1.5% year on year. Predicted inflation is nowhere near the dizzying heights that it was under Liz Truss’ watch, but with inflation projected to hover around 2.5%, working people may feel a negative impact on their living standards, even more so for as long as Labour fail to lower their drawbridge to the European Single Market & Customs Union.

This self imposed isolation has already caused our agricultural exports to fall off a cliff, with family run farms like the many based here in Mid Cheshire hardest hit. Inheritance taxes should not be imposed on farmers who have passed down their farms and land to their children who follow in their footsteps. Further revenue could have been raised by increasing capital gains tax to match income tax rates, but in this case, Labour are rewarding wealth over work.

Labour’s plans to relieve funding pressures on local councils are a step in the right direction. Extra funding for SEND provision, as campaigned for by CWAC SEND Accountability, alongside more funding to fix potholes is welcome. Allowing councils to retain tax receipts from property sales to reinvest in social housing will be a huge relief to low income families. However, unless Labour get to grips with adult social care, council budgets will continue to be squeezed, increasing the likeliness of councils calling referendums to request higher council tax increases. These are referred to as “Council tax flexibilities” in the budget small print.

On the surface, Labour’s green energy investment of £100bn has huge potential to transform the UK into a low cost green energy economy. The Hynet pipeline set to run under Cheshire soil requires further scrutiny, but these initiatives, combined with windfall tax reform and increased Air Passenger Duty are positive steps.

In summary, this is a safer and more stable budget than what we are used to, (thankfully), but I believe that the increased tax burden is punishing the wrong people. Small business owners and farmers are the biggest losers from this budget, and could feel too disenfranchised to boost our country’s productivity. A higher digital services tax, a tax on bankers bonuses and higher increases in capital gains tax, as proposed in our Fair Deal, could have raised greater revenue from those with broader shoulders. I admire Labour’s aims to decarbonise our economy and fix our public services, but low growth threatens the viability of their plans for health & social care. We are a services based economy and the Government seriously needs to reconsider rejoining the single market to give our economic growth a shot in the arm.

If you have any questions, thoughts or concerns about what this budget means for you, please email jack@jackpriceharbach.co.uk

Best Wishes,

Jack