Rising government borrowing costs will impact us all - now at 5.72%

The cost of UK government borrowing may feel like a boring subject and not relevant to us as individuals, but one would be wrong on both counts. The finances of any government have a very material impact on all our lives, and the costs to borrow for any government that isn’t living within its means, has a major impact on those finances.   

Over the last few months, UK borrowing costs have risen sharply, increasing the cost of financing government debt to more than £100 billion a year - almost 10% of the annual budget. To put this in perspective, our entire annual defence budget is £62 billion.

Many economists are warning the UK faces a unique strain on its financial position, caused by the government’s tax and spend policies, concurrent with projections that our aging society will place greater demand on public spending. We have also (rightly) pledged to increase defence spending due to global threats.

The interest rate on the UK’s 30-year bond rose last week to 5.62%, which is almost a 27-year high. To also put this in perspective, after the mini-budget during Liz Truss’ very short and disastrous time in office, the 30-year bond yield jumped to 5%, before falling back to about 3.5% after many of the mini-budget measures were reversed. Labour were relentless in the general election campaign, in saying that “the Conservatives crashed the economy” meaning the hike in borrowing costs, and yet now after a year of being in office, Labour are manging to make the days of Liz Truss look positively tame.     

This all puts the country in the same position as last year, dreading the upcoming autumn budget. Between 30 to 50 billion pounds needs to be found in either more taxes, higher borrowing, or reduced spending. The Chancellor has been boxed in by back-bench Labour MPs (including Crawley’s) who won’t allow her to slow down the future growth in the burgeoning welfare bill or reduce spending in any meaningful way. Reducing spending is the best way but Labour won’t do it, leading to us being on the road to ruin.

Horse racing at risk from planned tax hike

 

Horse racing - the UK's second largest spectator sport

Our nation has a love of horse racing, which is the UK’s second-largest spectator sport, attended by almost five million people each year. The horse racing industry, which supports 85,000 jobs, is expressing major concerns over the Labour Government’s plans to increase betting tax from 15% to 21% in the autumn budget, an increase of 40% from the current rate.

The argument for increasing this taxation, is to align betting taxes on horse racing with that of slot machines and online casino games which is already 21%. However, this fails to recognise the key differences between these types of gambling. Unlike online casino games, British horseracing makes an enormous contribution to both employment and our society, and has vastly different rates of gambling related harm. Unlike online casino games, betting on horse racing is not available every few seconds, twenty-four hours a day. 

The British Horse Racing Association commissioned economic research, showing that raising the current 15% tax rate paid by bookmakers on racing to the 21% that online games of chance have, could have a devastating impact on the sport with a £330 million revenue hit to the industry in the first five years, putting 2,752 jobs at risk in the first year alone.

Horse racing is worth £4.1 billion to the UK economy, but it’s not just the national economy that risks being impacted, it’s more locally too. Racing at Goodwood brings huge numbers of visitors into West Sussex, which I’ve seen for myself both on trains and on the road. We also have horse racing at Fontwell, Brighton and Plumpton, and not far to the north of us is Epsom racecourse. 

So concerned is the industry that this extra tax will make British horse racing financially unviable, that in an unprecedented move, horse racing will be going on strike on Wednesday 10 September with no race meetings taking place. They are saying that British racing is already in a precarious financial position and this could push it over the edge. They need to be listened to, or we risk losing a valuable social, cultural and economic asset.

One year on - Crawley's young people are paying the price of Labour

AI image to illustrate article  

The previous Conservative Government left office with low unemployment. In stark contrast, it is well-known that every Labour Government there has ever been, has left office with higher unemployment than when they took office. Last week the latest employment statistics were published, which with it being July’s data, meant a year of Labour being in office could be analysed.

Clear trends have emerged that are concerning. Nationally, unemployment has risen for ten months in a row, by 206,000 in total, and the number of people claiming Universal Credit has soared by over a million, to eight million people. There are now almost four million people of working age who are on benefits with no requirement to find work.

While we get the national figures, we don’t tend to get much reporting these days of local unemployment statistics, so I looked them up in the House of Commons Library. Given what’s in there for Crawley, it perhaps comes as no surprise that Crawley’s Labour MP doesn’t proactively share this data

In Crawley we have 3,700 people claiming unemployment related benefits, which is a 5% increase in the number of people from one year previously. Now higher than the national average of 4.7%, the claimant rate in Crawley was 4.8% for July, up from 4.7% in June. Sadly, unemployment in Crawley keeps ticking upwards and while it is very bad news for those directly affected, it is bad news for our town as a whole and our local economy.

According to the House of Commons Library, half of the total increase in Crawley’s rise in unemployment over the last year has come from 18–24-year-olds. We have 590 of 18–24-year-olds in Crawley who are on unemployment benefits, which is a significant increase of 19% more people than a year ago. 

Crawley has historically been a place of low unemployment but now it has crept above the (rising) national average. It's heartbreaking to see young people being shut out of the world of work and the opportunities that ultimately brings. The National Insurance rise in particular has led to recruitment freezes and that disproportionately impacts younger people at the start of their working lives. It needs reversing and if (now we are in this doom loop that Labour created) that isn't possible, then even a halving of it could lead to firms hiring once again and doors being opened for young people.

The Government needs to change course. Labour’s economic policies of ever higher taxes, higher borrowing and higher spending will only continue to damage business, hurt the economy and fuel inflation. Ultimately it is people who are paying the price, and Crawley’s young people are paying a heavier price than most.