During a lull in bustling lunchtime trade at Bury market in the north-west of England on Friday, stallholders Tony and Mary Sinacola mulled over the government’s radical tax-cutting “mini-Budget”.
A few hours earlier Kwasi Kwarteng, the chancellor, had unveiled the first fiscal event of the new administration, ushering in £45bn of tax cuts — the biggest in half a century — in a political and economic gamble set to predominantly benefit higher earners in the short term.
“So basically,” said Tony, sarcastically, “he hasn’t helped anyone that isn’t in the City of London?”
In fact the Budget provided cuts for people across the tax spectrum, reversing a recent increase in social security payments and bringing forward a 1p cut to the basic rate of income tax. However analysis by the Resolution Foundation showed nearly two-thirds of the gains in personal tax cuts would go to the richest fifth of households, which 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 it’s going to help here with the demographics we serve,” added Tony, whose stall sells Bury’s renowned black pudding.
The market sits in the constituency of Bury North, a marginal bellwether seat currently held by the Conservatives. While it has pockets of relative affluence, it also includes many poorer post-industrial neighborhoods, particularly around the town center. Nearly a third of children in the town were living in poverty in March, according to data gathered by the University of Loughborough before the impact of energy price rises was felt.
“I’m concerned that the tax cuts put forward 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 were seeing a rise in people already in energy arrears, he said, a situation that would not be alleviated by the government’s plan, announced in Friday’s fiscal package, to cap the average household energy bill at £2,500.
A proposed increase in universal credit, the main welfare payment, to help cover the soaring cost of energy is not scheduled to come until April, while those relying on it face hundreds of pounds in extra costs “just to stand still”.
“There’s nothing in today’s Budget that will help families in that situation,” said O’Dowd.
The government has gambled on cutting 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-style status of low tax and regulation, one of which may straddle the border of Bury and next-door Rochdale.
Councilor Nick Jones, former leader of the Tory group on Bury council, welcomed the fiscal statement, arguing it would create “more infrastructure, more investment and less regulation” for towns like Bury.
The tax changes would help “millions of people across the country”, he said, adding: “Growth will help raise wages, create jobs, lift incomes and generate more tax revenues which pay for valuable public services.”
On Bury market, however, stallholders were skeptical. One, who declined to be named, said the measures would help “the rich, not normal folk”.
Mike Millward, who runs the All That Glitters homeware stall, noted the market was a regular haunt of politicians at election time, given its beloved status locally and its location in a marginal seat.
“Whatever election it is, local or national, they’re here. Last year [former chancellor] Rishi Sunak was here and he called it Burnley market by mistake.”
When asked whether the budget would go down well locally, he said: “I don’t think so. Not when you look at the abolition of the higher rate. The gains there are much larger.”
Rob Ford, professor of political science at the University of Manchester, said the tax cuts were unlikely to be popular among the so-called “red wall” coalition of voters in Brexit-voting northern towns like Bury.
Nevertheless, he said, Labor would need to make the case against the chancellor’s approach. “It should be easier for Labor to say ‘this is a reckless bunch of nonsense in the middle of a cost of living crisis’, but they do have to do it,” he said.
“They can’t just assume it’s so self-evident voters will recognize that themselves,” he added. “Sometimes something that’s really obvious to the politically engaged becomes an obstacle, because they can’t think themselves out of it.”
But for the Sinacolas, the levels of borrowing required to carry out the tax cuts were a concern.
“It’s the younger ones who are going to pay for it,” said Mary.