Barbara called on the Conservative Government to reconsider the real impact of its policy to increase Insurance Premium Tax by 58%. Barbara said the tax increase, announced in the Summer Budget, will hit nearly all Salford families and will hit young drivers particularly hard.
Conservative Ministers are increasing the tax from 6% to 9.5%, the biggest increase to insurance premium tax for many years. Barbara is concerned that people who have higher premiums, such as young drivers or people who are unemployed, will suffer an even bigger hit than others due to this unfair tax increase.
“The Conservative Government has failed to consider the true impact of its policies on families and young people in Salford. Increasing the Insurance Premium Tax by 58% actually punishes those who act responsibly. It is effectively a tax on protection.
Insurance is vital to help people manage risks such as traffic accidents or theft from their homes. We should be encouraging people to take out policies that suit their needs. This tax increase means that people with higher premiums will have to pay much more for their insurance. Premiums have been climbing recently and insurers estimate that the average cost of a year’s cover for drivers younger than 25 will jump by almost £50 due to this tax increase alone. It is possible that fewer people will take out insurance, leaving their homes and cars and other people at greater risk.
The Conservatives’ Summer Budget was a tax-raising budget and it will hit family finances. I am calling on the Government to reconsider the impact of increasing the tax on insurance, as I believe it will have a serious impact on many people in Salford.”