Budget Resolutions
Last Wednesday my constituents in Eastleigh looked to the Chancellor for real help with the cost of living. While some of the measures that he announced are welcome, I am afraid that this Budget lacks ambition, and is short term and poorly targeted. According to the Resolution Foundation, the one-off household energy payment based on council tax band rather than need means that 1.4 million low-income households in higher bands will miss out, while the scrapping of gas standing charges will save the typical household just £1.83 a month. The cuts to VAT on electricity and fuel duty both end next July, long before the OBR expects pressure on family budgets to ease. For constituents like Susan, a widow who lives in a park home in Fair Oak, the Budget offered very little. She is off the main gas grid and has no choice but to heat her home with liquid petroleum gas, which is far more expensive and is not protected by the energy price cap. Her £100 payment will barely touch the sides, and scrapping standing charges does nothing for her. Will the Minister set out what support the Government will provide for off-grid households like Susan’s, who rely on liquid petroleum gas and are not protected by the energy price cap? The Chancellor’s decision to raise the threshold for small business rates relief from £12,000 to £18,000 is welcome. However, the policy does not live up to the headline, benefiting only a limited number of businesses in Eastleigh. On Thursday, I hosted a post-Budget business breakfast in my constituency. Lucy, who runs Telmar CNC, a precision engineering firm in Chandler’s Ford, told me that her rates bill has doubled in six years, and manufacturers like her business got nothing. Jane runs Elite Hair Salon, which, as a microbusiness, is too small for the changes to make any difference. She told me, “Overall, this Budget has done little to support my business or many others within the hair and beauty sector.” I welcome the extra small producer relief. However, raising alcohol duty yet again in February will hit the very pubs and drinkers that small brewers depend on, and that is why we oppose it. We are approaching Remembrance Sunday; and, in the current climate, ensuring that our armed forces are properly equipped is more urgent than ever. In Eastleigh, Stuart, who runs GW Martin & Co, has welcomed the Government’s commitment to small firms in the defence investment plan, but he told me, “We would like to see greater urgency in funding this necessary investment as we have capacity and capability to respond quickly, which will create jobs, growth and revenue.” Instead, the plan to reach 3% of GDP on defence has been pushed back to next year’s spending review. James, who owns JLMS—an apprenticeship provider—told me, “This was not a Budget for youth employment.” The payment for taking on an apprentice has not gone up in five years, while the cost of employing and training a young person keeps rising. The Chancellor had a choice. He could have reversed the increase to employer national insurance contributions, which has sent job vacancies to a five-year low. Instead, he told young people to wait for another review. On plan 2 student loans, this Budget was again silent. It was an opportunity to reverse last autumn’s deeply unfair decision to freeze the repayment threshold from April 2027 for three years. With the minimum wage rising and the threshold frozen, we are approaching the point where a graduate on the minimum wage could have to start repaying. I urge the Treasury to scrap the freeze and link the threshold to average earnings. I am pleased that the Chancellor has finally listened to Lib Dem calls to scrap the carer’s allowance cliff edge. That is a welcome first step, but it will not come into force until 2030, and carers trying to balance work with looking after a loved one need this safety net now, not in four years. Will the Minister commit to bringing forward its introduction so that carers do not have to wait until 2030? Eastleigh needed a Budget with real ambition, but this one falls short. I urge the Chancellor to go further.