The mini budget wasn’t welcome here either.

Esher and Walton is an affluent constituency. Many of our residents will have been the intended beneficiaries of the Government’s devastating, crisis-provoking “mini-Budget” last week. As the Resolution Foundation has reported, almost half (47 per cent) of the gains from the unfunded tax cuts will go to the richest 5 percent of households who disproportionately live in the South.

In Esher and Walton, over twenty-five thousand residents fall into the highest-rate tax band - the largest number of any constituency outside London. Someone earning £200,000 here will gain £5,220 a year from Kwasi Kwarteng; those earning more than £1 million a year will gain £55,220. They are undoubtedly the winners from the Chancellor’s reckless gamble.

But rather than celebrating I see deep unease here about Liz Truss’ budget gamble.  Over the weekend following the ‘fiscal event’ I heard huge concern that the tax cuts were underfunded.  By the football sidelines on Sunday morning, a Dad who worked in finance called the quashing of the OBR assessment ‘sinister’.  Another who worked in bond markets called it ‘a disgraceful mess, potentially a disaster’.  And this was before the IMF comments and the BoE intervention on Monday and Tuesday.  Add in a risk to pensions and the expected rise in interest rates, dip in house prices and risk of negative equity and you can see why people here are concerned.

But there was something beyond the personal losses and gains and the absence of economic prudence I picked up.  In a hairdresser over the weekend - among women who are in the higher wage bracket - there was also unease about something else. Anyone who lives in this part of the country knows that it is also one of the most unequal areas in the country: 1800 of our children live in relative poverty, with over 1600 of them eligible for pupil premium funding and free school meals. Elmbridge foodbanks gave out 10,000 parcels to local adults and children in 2021/22 - three times the amount distributed just 6 years ago. Funding to local public services across Surrey has been decimated in recent years, with significant impact on physical and mental health outcomes  - seen in schools throughout the constituency, and a crisis in provision of support for the youngest and most vulnerable in our community.  We can’t get Doctor’s appointments and there are millions waiting for hospital procedures as the NHS struggles to deal with demand.  We know that nurses and teaching assistant salaries are not keeping up with inflation and that they are finding jobs in supermarkets because the pay is better.  These cuts harm us all. 

After twelve years of the Conservative government’s cuts to services and lip-service to levelling up, what the country needed - what Esher and Walton needed - was for Truss and Kwarteng to choose to help those who needed it, not those who didn’t; to do whatever it took to help those with the least to insulate themselves and their families against the cost of living crisis, to fund the services that provide their safety net and to signal that they understood the scale of the storm ahead and were on their side. Instead, as the Resolution Foundation sets out, the incomes of the poorest households are set to fall next year (even without the threatened real-term cuts to benefits, which the Government may well now use to try to balance the books), while the households in the middle-fifth of the income distribution will be worse off by £123 on average in 2023-24. 

Meanwhile, what might that £55k windfall mean to those £1m+ earners who receive it? Extra spending in our high streets? Increased donations to our local charities? I’m sure that many will feel it is their duty to do so, and it will be welcome. But £55k would also fund two newly qualified nurses (Kingston Hospital’s vacancy rate is currently running at 10%); or two new teachers (and remember, our local schools haven’t even been given the money to pay for the recent, below-inflation, salary uplift for their existing staff). 

Truss and Kwarteng made an ideological choice last week. Even in a constituency like ours - with more individuals who are likely to benefit than in many other places - we ultimately all lose from it.