York’s Conservative Group has criticised today’s Budget as being at being a clear break of Labour’s manifesto pledge not to increase National Insurance and a Budget which will hit economic growth by raising the cost of employing people – which will limit their future wage rises for many people, at the same time as leading to higher inflation. The Budget will also hit those who seek to work hard and save and we already know of the damage done by the cutting of the Winter Fuel Allowance for millions as Labour diverted the money towards train drivers earning well over £60,000 per year.
The budget will hit York families in numberous ways including:
· A 1.2% increase in employers’ National Insurance and a near halving of the minimum level at which it is paid, raising costs for businesses which they will pass on.
· A hike in the rate of Capital Gains Tax disincentivising saving.
· Changes to Agricultural and Business Property relief – which will bring vast amounts of previous exempt family businesses into tax.
· Confirmation that VAT will come in on private school fees – which will see more pupils go into the state sector and could even end up costing more than it raises.
York Conservative Group Leader, Cllr Chris Steward said
The Budget is a terrible one for virtually all. Labour’s ‘growth’ rhetoric has been shown to be entirely vacuous and by hiking taxes on business growth will suffer. Labour has tied itself in knots on the definition of ‘working people’ but aside from the highest paid civil servants, who are protected, this budget seems to hit anyone seeking to work hard and do the right thing.
The Budget seems more about hope that reality it referenced improvements to come from technology as a way of saving money but with no tangible detail at all. Additionally the changes to the non-Dom rules, although not something we oppose on principle, look uncosted and likely to see even more high earners and therefore higher tax payers look to leave the country.
The supposed ‘black hole’ is a work of fiction, no country in the world has public finances as open as the UK, even without the OBR. A large part of the supposed black hole is based on the Conservatives granted the suggested public sector pay settlements in full and yet Labour deny the Conservatives would have implemented them. At the General Election we said Labour would be hiking taxes and they denied it but only ruled out a few they are now clearly going back on even some of those (notably National Insurance).
There are of course some things we would welcome – such as the increase in defence spending and what is promised to be a ‘significant real terms increase’ in funding to local councils, but as ever with Labour the devil will be in the detail. Additionally we very much support the plans to stop what the chancellor called the effective amnesty for low value shop lifters.
However ultimately whether people run a small business, want to pass assets to their children, or just go on holiday this is a budget that will cost virtually everyone a lot more and if that is not just directly from their pockets, it will also be in higher interest payments as the chancellor redefines how the government counts debt which will see ever more borrowing and interest payments.
