Budget tax rises won't help anyone
Britain’s economy is not in good shape.
When Labour campaigned to win the election, Rachel Reeves promised that her mission would be growth. As Chancellor, she even promised a ‘budget for economic growth’. Instead, Labour have delivered the opposite.
This has become an economy-destroying Labour government. Unemployment is up, inflation has almost doubled since the general election, and the latest figures show that growth is going in the wrong direction.
Business confidence has also sunk to record lows. Last week, I visited dozens of small family businesses across my constituency of the Scottish Borders. Many of them had a similar message: things extremely tough at the moment. The cost of employing staff, energy bills, and red-tape are all adding a significant burden to our small businesses. In fact, the average cost of employing a member of staff has surged by almost £1,000 per month, thanks to the 'Jobs Tax', and Labour’s Employment Rights Bill.
Rachel Reeves’ Budget last autumn was nothing short of catastrophic. In total, it was a £25 billion tax raid on British businesses. And changes to business property relief mean many small, family-run businesses are starting to ask whether the effort is all worth it. Farmers were hit too, with the government’s Family Farm Tax putting the future of British farming at risk.
All these decisions are pushing our economy into a tax doom-loop - higher taxes to fund more spending, which harms economic growth, meaning lower revenues, and then yet more tax rises. It is always hardworking businesses and families who pay the price for Labour’s economic failure.
Next week, Rachel Reeves will deliver her second Budget. It presents her with a choice that will impact every single one of us. She can fix the problems she has created or continue down her same failed path. She can choose to cut wasteful spending that we cannot afford. Or, the Chancellor can choose to hike taxes again, in what would be an unforgivable breach of the promises she - and every Labour MP – made to voters in last year’s General Election campaign.
My view is simple – if Rachel Reeves puts up taxes again in her Budget, she must be sacked.
The central part of the Labour government’s manifesto prior to the last general election was that they would not raise Income Tax, National Insurance, or VAT. It was on every Labour Party leaflet. It was in the Labour manifesto. Rachel Reeves said it time and time again.
The speculation of what Rachel Reeves will present in her budget has had a terrible impact on business confidence. There are endless rumours of more tax rises. Income tax hikes. Wealth taxes. ISA raids. Even a ‘milkshake tax’. How can we expect any business to plan for tomorrow, if the rules of the game continue to shift?
The Conservatives did not get everything right in government. Our party has recognised that, and it is why we suffered so badly in the 2024 General Election. Last month at Conservative Party conference, our Conservative team set out a plan for a stronger economy. A clear path to cut wasteful spending, which means we can cut tax and reduce the deficit. A ‘Golden Economic Rule’ which means of the savings the next Conservative government will make, half will go towards reducing the deficit, and the other half will go towards growing our economy.
Keir Starmer does not have the backbone to take the genuinely tough, but right decisions for our country. The truth is that we have become too reliant on the state. The result is more tax rises for everyone. It is terrible for business, and that impacts us all. When businesses suffer, they slow down recruitment. They may cut jobs, or they could even go out of business altogether.That means fewer jobs and opportunities for all of us, not least young people.
The Chancellor must use her budget next week to fix her past mistakes. If she does, she will have the support of the Conservative Party. She must not put up tax again. It will only lead to more unemployment, less economic growth, and higher inflation. That won’t help any of us.
John Lamont is the Conservative MP for Berwickshire, Roxburgh and Selkirk.
