For a government supposedly putting economic growth on top of its agenda, a £40 billion tax grab and hammering businesses large and small with the much-trailed £25 billion increase in employers’ National Insurance contributions was a bizarre way of going about it.
Set aside the justified arguments about whether it broke an election manifesto commitment ─ it did ─ hitting all employers with higher tax for giving people full-time work will hobble the jobs market and contribute to stifling the growth Labour Sir Keir Starmer says he prioritises.
Increasing the minimum wage obviously has populist appeal, but the only thing growing in this budget is the burden on employers who are simultaneously expected to keep on hiring to keep unemployment figures down.
The Growth Commission, an independent international economic think-tank, reckons Chancellor Rachel Reeves’ package could reduce GDP per capita by 8.8 per cent over the next six years, and the Office of Budget Responsibility has cut its growth predictions for the next three years.
Personal taxes might not have gone up ─ here in Scotland that dubious pleasure is no doubt to come when Scottish finance secretary Shona Robison unveils her budget on December 4 ─ but there will be no escape from the higher prices we will face as a result of the Chancellor’s assault on private business, which will also hamper the construction industry which needs to get cracking to tackle the housing shortage.
Ms Reeves’ claim that the biggest tax raid in 30 years is not a “return to austerity” will very ring hollow when the predicted revenues ─ like her VAT on education delivered by charitable private schools ─ fall short and jobs dry up.
What she really means is public sector workers will be shielded as she pumps our plundered cash into inefficient public services while reform-resistant unions are rewarded with inflation-busting pay increases.
Whether it’s Labour in London or the SNP in Holyrood, both assume we can tax our way to prosperity, believing governments know how best to spend our hard-earned cash when all around us our money is burned by an ever-expanding army of civil servants on policies which don’t achieve their aims.
The SNP presses on with care reforms costing over £2 billion to implement while services are desperate for resources. The baby box, symbol of Nicola Sturgeon’s attempt to recast herself as Scotland’s Mother Theresa, costs about £10 million a year for little discernible benefit.
Over-the-counter remedies like paracetamol are handed out free to people perfectly capable of sticking a packet in their supermarket shopping basket. Asylum seekers get free bus travel. The SNP hands £12.5 million to schools in Africa while ours are riddled with RAAC.
It must all be funded, and socialists think they can just come up with more taxes, be it up front like the SNP’s love of higher income tax and business levies, or Rachel Reeves’ ransacking raids on pensions, inheritances and capital gains as if they have no effect on the public.
Meanwhile, government borrowing is set to rise by over £140 billion more over the next five years compared with previous estimates, so we can kiss goodbye to lower mortgage rates.
We warned this would happen, and in December’s Scottish budget, the pillage people will return for more.
