Monica Harding

I am sure that the Chancellor is sick of hearing her own words from last year quoted back to her: “extending the threshold freeze would hurt working people. It would take more money out of their payslips”—[Official Report, 30 October 2024; Vol. 755, c. 821.] Yesterday, she froze income tax thresholds, dragging one in four people into higher rate or additional rates of tax and pushing the tax burden to an all-time high of 38% of GDP. Today, she is refusing to rule out coming back for more. Blindly copying the playbook of the last Conservative Government, she is the continuity Chancellor. There is still no vision for growth, just that old-style Labour tax and spend. It is like new Labour’s wealth creation to pay for better public services never happened. The Government may like to blame the Conservatives for the OBR’s downgrade in growth, but the OBR has said that none of the measures in the Budget will boost growth. In fact, the Budget may actively harm growth. The OBR has said that slower wage growth and higher taxes mean living standards will rise more slowly than expected. Take, for example, the raid on pension contributions: the OBR tells us that employers will pass on the cost of the £4.7 billion tax raid on pension contributions to employees through lower wages and less generous schemes. The CBI has data showing that three quarters of employers will decrease pension contributions as a result. It is a tax on those doing the right thing. That comes after Government policies harmed businesses in their first Budget, including the national insurance increases that have put thousands of pounds on to a load of businesses in my constituency, causing them to hire less and cut hours for the very people that the Government say they want to protect: part-time, low-paid workers, often with caring responsibilities. Higher unemployment in turn means more spend on universal credit—indeed, £1.8 billion more, as estimated by the OBR, on unemployment. It is all the wrong way round. Yesterday, one long-term successful business owner in my constituency said to me: “The whole thing is just depressing. I could work for another 10 or 20 years creating wealth for the economy, but the Government is making it so hard I may as well retire. And if I was in my 30s, I wouldn’t choose to do it here any more—I would move overseas.” She is one of our wealth creators—she creates the growth we need. Another large business in my constituency who once felt confident about investing in Britain, creating growth and hiring new staff is now telling me that it is scaling back plans, postponing projects altogether and contemplating offshoring. Talking of supporting people trying to do the right thing, let us turn to landlords. One of my constituents, who is known as a decent landlord, told me yesterday: “I may as well pull out—what is the point? I get 2% gain on my properties. I may as well put it in the bank and get 4%.” The Government’s policy will take rentals off the market and increase rents. In Esher and Walton, where rental prices are sky high, that means more people will not be able to afford to live there. The property tax will gum up the housing market and distort it by bunching properties for sale below the threshold. It is said that the surcharge will raise more than £600 million, but that will be offset by £200 million of behavioural impact, so the take-home is £400 million, which is a rounded-up figure. In London and the south-east, where the average price per square foot is higher, those properties might not be such big houses, and in them are likely to be pensioners. Public First has said that two fifths of homeowners in bands G and H are pensioners.