Inflation has now more than halved to 4 per cent and is forecast to fall to 2 per cent in the next few months, far outstripping previous predictions.
We are also seeing borrowing rates decrease, typically an indicator that the economy is about to make a recovery. This, for example, has allowed the chancellor to extend the 5p cut to fuel duty for another 12 months. Since its inception in March 2022, this has saved the average motorist £250.
Further to the clear path the chancellor set out and our ongoing recovery, Mr Hunt has been able to cut employee National Insurance by a further two percent, on top of the two per cent cut in the autumn statement, which will put a total of £900 back into family budgets in York.
Thousands of self-employed workers in York will receive a second tax cut through a further 2p reduction in the National Insurance contributions main rate from 8 per cent to 6 per cent – saving the average self-employed worker £650 when combined with cuts in the Autumn Statement.
Families in York will be further supported by changes to the child benefit threshold, which will come into place in April alongside the National Insurance cuts.
The threshold to start paying back Child Benefit will increase in April from £50,000 to £60,000 – a 20 per cent increase which will take 170,000 families out of paying the charge this year – while Child Benefit will no longer need to be repaid in full until earnings exceed £80,000. This represents a £1,260 boost on average for around half a million working families, rising to nearly £5,000 for some families when the full package of measures from the last two fiscal events are taken into account.
As ever, I was lobbying on behalf of businesses in York ahead of the budget so I was pleased to see the VAT threshold raised from £85,000 to £90,000. While it is a small increase it will help bring a number of businesses out of paying VAT altogether, a great boost for many local businesses.
I hope this is just the start of a trend of gradually raising the threshold to lower the tax burden on small businesses in our city.
Through difficult economic circumstances, the Conservative Party has never cut the NHS budget in the last decade. In fact, we have continually boosted funding ahead of inflation.
This trend continues. The NHS will receive £3.4 billion over the forecast period – doubling investment in digital transformation, significantly reducing the 13 million hours lost by doctors every year because of old IT and delivering test results faster for 130,000 patients a year thanks to AI-fitted MRI scanners that help doctors read results more quickly and accurately. I will work to ensure York Hospital receives its fair share of funding so residents can see the benefits of this funding boost.
There is always more I would have liked to see, particularly on SEND and support for pubs given the representations I had made with colleagues ahead of the budget.
Beforehand, I had signed two letters aimed at helping pubs: one calling for alcohol duty on pints to be cut to 20 per cent, another calling for a variety of measures.
I would have liked to have seen the standard business rates multiplier capped. This is still due to be increased in April at more than twice the rate of underlying inflation. Alongside, a reduction in Employer NI contributions would have been welcomed.
The implementation of the National Living Wage increases will inevitably lead to increased staff costs, not just in terms of the uplift but will also impact as businesses try to maintain differentials.
A reduction in Employer NI contributions would have helped to ease this cost burden.
Nevertheless, I remain acutely aware of the necessity to spend within our means. With this in mind, the chancellor has pulled all the levers at his disposal to deliver for families in York and across the country.
Julian Sturdy is the Conservative MP for York Outer
