‘Grim economic’ news from chancellor’s emergency budget - says North West Norfolk MP

In his weekly column, North West Norfolk MP James Wild discusses the Chancellor’s emergency budget…

Growth, growth, growth.

That has been this government’s mantra and everyone wants to see our economy growing and real wages increasing.

But when the Chancellor, Rachel Reeves, came to the House of Commons last week to deliver her emergency budget it was with grim economic news.

Independent forecasts for growth this year have been halved to one per cent. Inflation is set to rise again to 3.2 per cent. Unemployment is expected to be higher this year, next year, and the year after.

These disappointing figures are sadly the result of decisions the government took after the election.

The prime minister and chancellor talked down the economy then which spooked business confidence and consumers.

In October’s Budget, they chose to increase taxes by £40 billion a year and spending by £70 billion a year, with higher borrowing to fill the gap.

Those taxes include the £25 billion a year jobs tax that begins this week and will cost employers £800 a year per worker on average – the independent OBR (Office for Budget Responsibility) expects this to lead to fewer jobs, higher prices and lower wages.

I am particularly worried for people working in the hospitality and retail sectors as many companies have warned they will have to lose staff and will be pausing taking more on.

It is not only the jobs tax – business rates are being almost doubled for pubs, shops, and leisure attractions.

Nurseries have also warned there could be closures due to Budget measures. Care homes are taking unprecedented legal action over the costs they are facing which threaten their viability.

So when the chancellor had the chance, did she change course? No. There were no measures to help lift the pressures companies are facing.

No recognition of the reality facing businesses across the country. It is very concerning that the chancellor has not listened to employers who have warned of the damaging impact the government’s policies are having on jobs and growth.

Indeed, she doubled down on her approach. Having been forced to cut spending to meet her “cast-iron” borrowing rules, the chancellor once again has left a tiny amount of contingency - just £9.9 billion out of spending totalling over 100 times that.

If tariffs are imposed by President Trump this week or there are other developments then the independent Office of Budget Responsibility said she has a 50:50 chance of breaking her rules.

While the chancellor may appear an unlikely gambler, she is effectively betting on a coin toss going the right way.

Otherwise, in the autumn she will have to break her promises and increase taxes or cut spending again.

And while growth is flatling, households are facing prices hikes as energy, water, council tax, broadband and other bills go up by more than inflation this week.

The chancellor is also making it more expensive to move or buy a house. If you are struggling with costs do check with your provider if there are cheaper deals, if you are entitled to social tariffs, if you can access the Household Support Fund through the council, or check out Citizens Advice help www.citizensadvice.org.uk/

Growth is this government’s priority and they will be judged by how the economy performs.

It is time for them to listen and change course before those concerning economic predictions become reality.