It’s wonderful that my friend, Martin McCluskey MP, is willing to write his regular column for the Greenock Telegraph; it allows us to understand his thinking. 

In his column on Saturday, November 2, he works hard to convince constituents that Labour’s nightmare Halloween budget “will deliver for Inverclyde”.

This Budget provides ample opportunities for us to understand just how socialist ideology is driving this Labour government.

Take the £25bn increase in employer National Insurance contributions, which highlights two crucial principles of taxation. Firstly, the tax incidence does not necessarily fall on the person who pays it. Often, the real burden is shifted elsewhere. In this case, they may be taxing businesses, but they are really making employees more expensive. 

What matters to employers is not just wage costs but total employment costs, including taxes, pension contributions, and other benefits. The effect of higher payroll taxes is likely to be lower-than-otherwise wages or fewer job opportunities. You can say you’re not taxing workers until you’re blue in the face; the economics of taxation tell a different story.

Further, taxes affect behaviour – which distorts the economy and often limits the revenue raised. In this case, the Office for Budget Responsibility predicts the employer National Insurance hike will be passed through into lower wages, lower profits, and higher prices, which cancel out £9bn or so of the revenue increase. 

Add in higher costs in the public sector (tellingly, the Labour government is increasing spending to offset higher payroll taxes) and about 60 per cent of the ‘scorecard’ tax increase is gone before you even start.

St. Columba’s independent school in Kilmacolm and, until recently, Ceder’s school in Greenock (they’ve had to close their doors) qualified for a VAT exemption. These private schools provide a service that would otherwise have to be provided by the council. 

While powers to change the VAT status of school fees are a matter for the Labour government, the Scottish Conservatives support the VAT exemption for private schools.
Labour’s decision to impose a 20 per cent tax on school fees makes private education unaffordable for many parents who send their children to local private schools or have aspirations to do so, meaning they would have to move into the state school sector. This means a substantial increase in the number of additional pupils who the public purse must accommodate.

In Scotland, the SNP government is responsible for funding our state schools, and they are already struggling to cope with 17 years of neglect by the SNP. When they suddenly have to cope with thousands of extra pupils due to this Labour policy, it will further make education standards suffer.

Under the SNP’s watch, school standards have already plummeted, with Scotland’s reading, maths and science scores falling to their lowest-ever level in the most recent Programme for International Student Assessment (PISA).

Pre-budget speculation about capital gains tax (CGT) seems to have led to an uptick in asset disposals and entrepreneurs fast-tracking their exit plans. Now that CGT rates have risen, will we see greater ‘lock-in’ effects with people holding on to assets they would otherwise sell, hoping that a future government will cut tax rates again?

Time and again, we see economic decision-making driven by tax policy; this is horrible for our overall economic performance.

The spending power of people’s payslips will be reduced as a direct result of Martin’s nightmare Halloween budget!

Councillor Graeme Brooks
(Conservative, Inverclyde North)

‘Fantastic news on pathway’

Events have overtaken my proposal (Tele Postbag, October 21) that an additional path should be built to the top of Dunrod Hill, although it may be that in the future the road from the Argyll & Sutherland Highlanders Memorial could be surfaced to the ‘Scroggy Bank Road’ and give better access to Dunrod. 

The proposal has been overtaken in respect that a brilliant pathway now goes from Lunderson Bay to Inverkip. 

Well done to Inverclyde Council and Hamilton Tarmac for their work. This is a terrific asset to the area; may we have many more.

Archie Wilson
Greenock