Government is playing ‘Buckaroo’ with businesses, says North West Norfolk MP James Wild

In his weekly column, MP James Wild discusses the economy…

In a week’s time the Chancellor will come to the House of Commons to respond to the latest forecasts on the economy and spending. There is much speculation that she is in danger of breaking her own fiscal rules and may have to increase taxes or cut spending – hence media reports about welfare savings.

It comes against a disappointing backdrop with figures on Friday showing the economy shrank by 0.1% in January. Since her October Budget which increased taxes by £40billion a year, business confidence has plummeted. That means firms putting on hold plans to hire more people and pausing investment decisions.

When I surveyed small businesses recently, local firms said increases in national insurance taking effect in April were their main concern. And last week in Parliament we debated employment legislation that will add £5billion a year to business costs. Firms simply cannot absorb those costs.

Major employers have warned these changes will make it less likely they will take a chance and offer jobs to younger people, ex-offenders and people from other vulnerable groups most affected.

My concern is the Government is treating businesses like the mule in the game “Buckaroo”, loading on more and more costs and obligations. Anyone who has played the game will know that it is inevitable that there will be a reaction and the mule will buck. In economic terms, that means fewer jobs, higher prices and lower wages.

So the Chancellor should listen to the warnings being sounded by companies and rather than double down the government should change course and rethink its tax rises next week.

On the other issues she is considering, at the election we set out plans to make welfare savings of £12billion a year by helping more people into work while protecting those who cannot work - the government should follow our lead. There are also significant savings to be made by reducing the civil service back to pre-pandemic levels.

Some of the sectors that will be most affected by increased costs are tourism, leisure, and hospitality - with 750,000 jobs being subject to national insurance in tourism alone for the first time, costing £1billion.

As English Tourism week started at the weekend, I was enjoying the sun and views at Brancaster Staithe and along the coast. Tourism is worth £565million a year to West Norfolk and supports around a fifth of local jobs – nationally that is 2.6 million people and £71.6billion. Last year there were 10.5 million day and overnight trips to enjoy everything on offer here.

That is testament to the brilliant local businesses, growers and attractions we have and why supporting them this week and all year round is so important. Exciting projects including Shakespeare’s St. George’s Guildhall will help further strengthen the offer to local people and visitors alike.

While international events and Ukraine dominate much of the focus, it is what happens in the economy that people raise frequently with me. With energy bills going up rather than falling as the government had promised and inflation increasing, the Prime Minister should be taking seriously the warning lights flashing on the economic dashboard.

At next week’s statement and beyond, I’ll continue to hold the government to account to put in place policies to help grow the economy.