During a break in the busy lunchtime trade at Bury market in north-west England on Friday, stallholders Tony and Mary Sinacola pondered the government’s radical “mini budget” tax cuts.
Hours earlier, Chancellor Kwasi Kwarteng had unveiled the new administration’s first fiscal event, ushering in £45bn of tax cuts – the biggest in half a century – in a political and economic drive that will mainly benefit higher incomes in the country. short term.
“So basically,” Tony said, sarcastically, “he hasn’t helped anyone who isn’t in the City of London?”
The Budget actually delivered cuts for people across the tax spectrum, reversed a recent rise in social security payments and brought forward a 1p cut in basic income tax. but analysis by the Resolution Foundation showed that almost two-thirds of the gains in personal tax cuts would go to the richest fifth of households, who would be better off by an average of £3,090 a year. The poorest half would earn an average of £230 a year.
“I can’t see how many people it’s going to help here with the demographics we serve,” added Tony, whose stall sells Bury’s famous black pudding.
The market is in the Bury North constituency, a marginal bellwether seat currently held by the Conservatives. Although it has pockets of relative prosperity, it also includes many poorer post-industrial neighborhoods, especially around the city center. Almost a third of children in the town were living in poverty in March, according to data collected by the University of Loughborough before the impact of energy price rises was felt.
“I am concerned that the tax cuts proposed today will not help people in communities in need in towns like Bury,” said Patrick O’Dowd, director of the charity Caritas, run by the Roman Catholic Diocese of Salford.
The charity’s two centers in Bury saw a rise in the number of people already in energy arrears, he said, a situation that would not be alleviated by the Government’s plan, announced in Friday’s budget package, to cap the average household’s energy bill at £2,500.
A proposed rise in universal credit, the main welfare payment, to help cover the skyrocketing cost of energy is not scheduled to come until April, while those who rely on it face hundreds of pounds in extra costs “just for to stand still”.
“There is nothing in today’s budget that will help families in that situation,” O’Dowd said.
The government has moved to cut taxes – funded through borrowing – in a bid to boost Britain’s competitiveness and boost growth. Part of that growth plan involves the introduction of new “investment zones”, areas with freeport-like status with low tax and regulation, one of which could stretch across the border with Bury and neighboring Rochdale.
Councilor Nick Jones, former leader of the Tory group at Bury Council, welcomed the finance statement, claiming it would create “more infrastructure, more investment and less regulation” for towns like Bury.
The tax changes will help “millions of people across the country,” he said, adding, “Growth will help raise wages, create jobs, lift incomes and generate more tax revenue that pays for valuable public services.”
At Bury market, however, the stallholders were skeptical. One, who declined to be named, said the measures would help “the rich, not normal people”.
Mike Millward, who runs All That Glitters homeware stall, noted that the market was a regular haunt for politicians at elections, given its beloved status locally and its location in a marginal seat.
“Whatever election it is, local or national, they are here. Last year [former chancellor] Rishi Sunak was here and he called it the Burnley market by mistake.”
Asked if the budget will go down well locally, he said: “I don’t think so. Not when you look at the abolition of the higher rate. The profit there is much greater.”
Rob Ford, professor of political science at the University of Manchester, said the tax cuts were unlikely to be popular with the so-called “red wall” coalition of Brexit-voting voters in northern towns such as Bury.
Still, he said, Labor would have to make the case against the chancellor’s approach. “It should be easier for Labor to say ‘this is a reckless pile of nonsense in the middle of a cost of living crisis’, but they have to,” he said.
“They can’t just assume it’s so obvious that voters will recognize it themselves,” he added. “Sometimes something that is very obvious to the politically engaged becomes an obstacle, because they cannot think about it.”
But for Sinacolas, the levels of borrowing required to implement the tax cuts were a concern.
“It’s the younger ones who are going to pay for it,” said Mary.