What should have been a 'mini-Budget' included significant tax and spending changes. On the morning inflation hit 6.2 per cent, the chancellor unveiled his new 'tax plan', claiming it would 'put billions of pounds back into the pockets of hard-working people.'
The chancellor announced a tax cut for nearly 30 million UK workers through a rise of £3,000 in National Insurance (NI) thresholds – saving the typical employee over £330 a year from July. From July, workers will keep more of what they earn, not paying a single penny income tax or NI on the first £12,570 they make. However, tax rises will cost every adult £1,000 a year extra.
Mr Sunak also pledged to cut the basic rate of income tax. But Brits will have to wait until 2024 before paying 19p per pound rather than 20p.
Lisa-Marie Mallier, host of Banbury Buzz networking group, said: "This is the biggest cut to personal taxes in a quarter of a century, and certainly a crowd-pleaser. Sadly, any benefit for the hard-working people of Banbury will be clawed back by soaring Inflation and rising living costs. In times of crisis, we need more than a sticking plaster."
The chancellor also set out a series of measures to help businesses boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million smaller firms.
Lisa-Marie added: "Mr Sunak also cut fuel duty by 5p per litre. Banbury's diverse economy relies on manufacturing, logistics and distribution, retail and home, health, and social care. The minor cut to fuel duty is unlikely to be enough to help many businesses and low-paid staff reliant on driving."
Greg, an Oxfordshire-based will writer, said: "The cut in fuel duty is a mere drop in the ocean given recent rises. A windfall tax on large corporations making billions while others struggle to heat their homes or get to work would have been nice."
Eileen Thompson, the landlady of The White Horse, said: "The business rate reduction is great news, yet Inflation will undoubtedly impact consumer spending. It would have been good to see measures to support struggling town centres or incentivise new entrepreneurs."
Emma McGregor, commercial director for Bloxham Mill Workspaces, said: "The pandemic impacted many businesses who have had to continue paying their business rates during testing times. It would have been good to see some sort of a break for them."
Impact on homeowners and the housing market
Banbury is the largest town in the Cherwell district. The average house price in Cherwell is now £335,423, well out of the reach of many first-time buyers. Around 7 per cent (4,498) of households are in fuel poverty.
Alec, a local letting agent, said: "Inflation rising to a thirty-year high will impact those seeking new mortgage deals and those considering a buy-to-let. There is likely to be a bigger reliance on the 'bank of mum and dad', making it beyond the average person's reach to achieve the dream of homeownership."
Mr Sunak also slashed VAT from 5 per cent to zero for five years on energy-saving materials such as solar panels, heating pumps and roof insulation, helping families become more energy-efficient,
Derek, a local renewable energy consultant, said: "Positive news with the reduction in VAT on solar panels to zero per cent for the next five years, and good news for domestic homeowners given the energy price rises. Now more than ever, we need to save where we can and create our own energy."
Business Buzz is an informal, non-membership professional networking group with 35+ events across the UK. Banbury Buzz meets at The White Horse on North Bar Street every fourth Wednesday of the month. To find out more see its website here: www.business-buzz.org/oxfordshire.