Mini-Budget Survey 2022

Our new Chancellor, Kwasi Kwarteng, has announced several policies aimed at:

1.) Stimulating growth in the economy across the UK

2.) Supporting households with rising costs following Russia's illegal invasion of Ukraine

Please let me know what you think of the individual policies below: 

1) Tax-Free Personal Allowance & National Insurance Threshold

In 2010, the tax-free Personal Allowance was £6,475 - that's the amount you could earn before you started paying tax (20% of income above that level) and the threshold before which you pay National Insurance was £5,715 (12% of employee earnings above that level).

Since then, both have been increased to £12,570, with the big rise in the amount you can earn before paying National Insurance coming in this year. This change is significantly over inflation over the last few years, meaning that millions of people (especially pensioners and part-time workers) have been taken out of paying tax altogether and it means tens of millions of workers earning more than that keep more of their own money too.

Which statement best reflects your view?

2) Energy Profits Levy 

Russia's illegal invasion of Ukraine has driven energy prices sky-high around the world with gas quadrupling in price and oil doubling. The Energy Profits Levy is a windfall tax introduced by the Conservative Government in June 2022, to ensure that excess profits energy companies were making, purely as a result of Russia's illegal war, would overwhelmingly go to helping people with bills. This levy means North Sea oil and gas companies must pay up to an additional 25% tax, bringing the total tax they pay on profits up to 65%. The money raised is helping pay towards cost of living measures. 

What are your views on this Levy?

3) Energy Price Guarantee

The Chancellor announced that we're freezing the cap on energy bills this winter, so that the average household pays no higher than £2,500 on their energy bills. This will save the average household £1,000 a year. This is on top of the additional measures including the £150 Council Tax Rebate, £400 cost of living support that energy companies have to pass on to their customers, and further support for pensioners and those on the lowest incomes.

What do you think of the Energy Price Guarantee?

4) Investment Zones

The Chancellor has announced that the Government will set up investment zones across the country to help drive economic growth and create employment opportunities for local people. These zones will be bid for by local councils (not imposed from Central Government) and have key features, like £0 business rates for periods of time, quicker planning decisions etc.

What is your view of investment zones?

5) Measures to Increase Growth

Key measures to boost growth including keeping Corporation Tax at 19% and changing the pay structure in the financial services sector have been proposed. These actions are designed to ensure that we have one of the most competitive developed economies in the world, stop a drain of jobs from the City of London to New York, and to encourage investment in the UK more broadly.

What do you think of these measures?

6) Cuts to Income Tax

The Government is planning to reduce income tax rates. It had been planned that it would reduce the basic rate of income tax to 19% from 20% in April 2024. However, it is now planning to bring this forward to April 2023, meaning over 31 million people will benefit. 

What do you think of this changes to income tax?

7) Fuel Duty

What's your opinion on our action on fuel duty? In Spring 2022, the Government made the biggest cut to fuel duty on record. Along with this, we have frozen fuel duty every year since 2010. These two policies together save the average car driver £100, the average van driver £200, and the average haulier £1,500. 

8) Universal Credit (UC)

I was one of the Member of Parliament who argued hard for the Government to reduce the Universal Credit taper rate from 63% to 55%. This means that people in low paid work who are on Universal Credit get to keep more of what they earn and encourages them to work more. Because of this change, 1.9 million low paid working households, including thousands in North West Durham, will benefit from an average of £1,000 per year - which will be worth even more if they take on extra hours.

What do you think of this policy change?

9) Stamp Duty

The Government has made changes to stamp duty to make it easier for people to buy their own home. This means that first-time buyers won't pay any stamp duty up to £425,000, or £250,000 if you're not a first-time buyer.

What do you think of this change?

10) Overall Economic Situation

Russia's illegal invasion of Ukraine has caused global spikes in energy prices, which have led to rises in inflation and real pressure on household incomes and prices across the world. Inflation is currently 10% in Germany, 9.9% in the UK, 8.3% in America and at similarly elevated levels across the globe. 

To combat this, central banks across the world have started to raise interest rates. Here in the UK, interest rates have risen from their historic lows to 2.25%, in America, interest rates are currently 3.25%, Australia 2.6%, and in the Eurozone and Switzerland they've just risen by 0.5% and 0.75% respectively with more rises expected in coming months.

This is leading to concern about how people will be able to make ends meet with rising costs.

What is your greatest concern at the moment regarding the economy?