The Budget must reset relations with business and the rural economy
As a Conservative, I believe in lower taxes. I believe that people, not governments, make the best decisions about how to spend their own money.
Last year’s Budget hiked taxes by £40 billion a year. This included the hugely damaging increase to employer’s National Insurance Contributions, adding almost a thousand pounds to the cost of employing someone. At the same time, the Chancellor withdrew vital support for our high streets by raising business rates. This costs pubs on average three thousand pounds extra.
These hikes mean that the tax burden will reach a historic high by 2028, and account for more than a third of GDP, of what we actually produce in the UK.
The latest statistics have also confirmed that economic growth has flatlined. This is despite the Chancellor’s promise to “lead the most pro-growth, the most pro-business Treasury that our country has ever seen, with a laser focus on delivering for working people”.
How has that been going? Since last year’s Budget, over one hundred thousand jobs have been lost. The Chancellor's policies have killed growth, fuelled inflation, and reduced opportunities for residents in South Shropshire. Unemployment is at a level not seen since the pandemic.
For my constituents in South Shropshire, this is made even worse by the rural effect. On average, productivity, earnings, and ease of access to further education are all lower in rural areas than urban ones. Closing these gaps could add billions to England’s economy.
In this year’s Budget, the Chancellor must reset relations with the rural economy and set out clear support for our communities.
To start with, the Budget must repeal the cruel family business and farm taxes that threaten national food security. Farming is a fundamental part of life in South Shropshire and an immense source of local pride. However, farmer confidence has dropped to its lowest-ever level under this government, which has closed a whole raft of support schemes that the Conservatives had opened. More than 6,000 farms have already closed for good. The Chancellor must change course. The Conservatives would abolish the Family Farm Tax at the earliest opportunity.
The Budget must also reverse the hike in business rates for our high street businesses. More than a thousand pubs and restaurants have closed, many in my constituency. That is the equivalent of two every single day. Now, the British Beer and Pubs Association has warned that two hundred more pubs could soon close in the West Midlands if the Autumn Budget does not change direction.
The recent Red Flag Alert from Begbies Traynor found that more than four thousand businesses are in significant financial distress. That is in Shropshire alone – a fifteen per cent increase compared to last year. Undoubtedly, this has been driven by expensive energy bills and supply chain costs. The biggest factor, businesses tell me, is the government’s damaging tax hikes. A future Conservative Government would abolish Business Rates for thousands of retail, hospitality and leisure businesses.
It is outrageous that Ministers are plotting a multi-million tax raid on the horseracing sector, with a flat rate tax on remote gambling that would equate it to online slot machines. Ludlow Racecourse is integral to our rural economy, supporting over one hundred local jobs. Many residents enjoy watching the races and placing a bet on their favourite horse. Horseracing has clear economic and social benefits in rural areas like South Shropshire. The Chancellor should rethink her plans and axe the Racing Tax.
The final area worth highlighting is council tax. The County Councils Network has named Shropshire Council as one of sixteen local authority areas that would see significant cuts in direct government funding due to proposed changes in council tax. Modelling suggests that it could strip Shropshire Council of £9 million in government funding over the next three years. Shropshire Council is in a dire state financially and these reforms could jeopardise local services.
A year ago, the Chancellor told the country that she was not coming back with more tax hikes. The Budget last year has undoubtedly damaged growth and driven up public spending, giving the Government even less financial headroom. Coming back for more tax rises this year is a clear mark of failure for this Government. Pensions, savings, cars, and houses are all sadly in Labour's sights. For both residents and businesses in South Shropshire, this is truly the nightmare before Christmas. As the Shadow Chancellor has said, if Chancellor Rachel Reeves breaks her promises to the British people, she must go.
Stuart Anderson is the Conservative MP for South Shropshire.
