Devon MP responds to budget

In response to the Labour Government's 2024 Budget, delivered by the Chancellor, Rebecca Smith, the Conservative MP for South West Devon, has voiced strong concerns over a series of tax increases that she argues will disproportionately impact working families, small businesses, and the agricultural sector in her constituency.

The Chancellor's budget outlines a £40 billion tax increase, which includes a significant rise in employer National Insurance contributions, a move that Ms Smith claims will place a heavy burden on the workforce. 

“This £25 billion tax on working people by increasing employer’s National Insurance contributions – as they raise the tax burden to the highest level in our country’s history,” she stated.

Ms Smith expressed particular worry about the implications for small businesses, stating: “I have real concerns that this National Insurance increase will be devastating for the thousands of small businesses across South West Devon, creating a knock-on effect on dampening down wages and raising prices at the tills.”

The budget also includes hikes in capital gains tax, tax on inherited pensions, and VAT on school fees, all of which, Ms Smith argues, will hit local families hard.

She expressed grave concerns for the farming community, highlighting: “In my opinion, the Chancellor’s choices spell the end to the family farm. An inheritance tax charge of 20 per cent for any farm valued over £1 million, as well as land management and farming budget cuts, will deal a hammer blow to the ambition of maintaining viable farms and food security; any thoughts of leaving family farms to the next generation will be re-considered, and we run the risk of our vital farms being broken up for parcels of land. This spells disaster for South West Devon.”

On infrastructure, Ms Smith noted the apparent neglect of the South West, particularly in relation to key rail projects. 

“The Chancellor made a deliberate choice to ignore the Southwest. She announced a stream of infrastructure projects across the North and Midlands and it soon became clear that the Southwest would miss out. No mention of vital rail resilience required for the Dawlish train line. What about progressing plans for a Tavistock rail line? And where is the commitment to Derriford Hospital’s Urgent and Emergency Care facility?”

Ms Smith, a member of the Transport Committee, has been actively campaigning for the Government to reallocate HS2 funding for the proposed Tavistock Line and for further funding to complete strengthening works on the Dawlish railway. 

She expressed disappointment that these crucial projects were ignored in the budget.

On the health front, while the budget announced an additional £22.6 billion for the NHS, Ms Smith lamented the lack of specific commitments for Derriford Hospital. 

“An additional £22.6bn NHS spending was announced, yet still no solid commitment for the region’s Derriford Hospital, kicking its new Urgent and Emergency Care facility even further into the long grass until at least January. Fearing that the Urgent and Emergency Care facility would be abandoned by Labour, I launched my petition to save the funding for the centre, and presented this in Parliament on Monday prior to the budget,” she remarked.

Ms Smith also raised concerns about housing, warning that a stamp duty rise on second homes could negatively impact the rental market, ultimately burdening renters. 

First-time home buyers will also face increased costs as the stamp duty threshold reverts from £425,000 to £300,000 next April.

She noted the Government's failure to address child benefit reform, leaving single-earner or single-parent families at a disadvantage. 

“Instead of making the child benefit system fairer, as the former Conservative Government proposed, Labour have chosen not to base the high-income child benefit on household incomes,” she stated.

In a positive note, Ms Smith acknowledged that the Chancellor listened to constituents regarding fuel duty, which will remain frozen, preventing additional costs at the pump.

“At least the Chancellor listened to constituents’ concerns about fuel duty which I raised directly with her. It continues to be frozen meaning no additional costs at the pump,” she said.

Ms Smith is encouraging her constituents to share their thoughts on the budget directly with her, urging them to reach out via email at rebecca.smith.mp@parliament.uk