WHETHER it’s the cost of living, the cost of renting, or the cost of running your business, people across the country will be familiar with the strain on our economy over recent years.

We’ve seen incomes fail to keep pace with costs and, on top of that, businesses penalised by tax thresholds that failed to reflect the state of the wider economy. Here in St Austell and Newquay – and indeed, the whole of Cornwall – we’ve been feeling the effects of a struggling economy even more.

While costs like house prices and business rental have continued to soar due to high demand in Cornwall, wages and income have not, creating the particular phenomenon of ‘Kernowflation’.

This is one of the reasons why I asked the chancellor to consider the potential impacts of incomes not keeping pace with changes in tax brackets on lower income workers and pensioners in Cornwall. However, we also need to focus on what can be done for businesses struggling with the same issue.

In my time as an MP, I’ve met with countless businesses who are struggling against a VAT threshold that has not kept pace with inflation, and small business rates that hit them harder and sooner than they would were they based elsewhere in the UK because of our underlying ‘Kernowflation’.

It’s clear the systems put in place at the moment are not working for us. Progressive taxation designed to level the playing field is not having the desired effect in Cornwall, since businesses here face a much higher fixed cost base. This means that those taxes, levies and rates essentially kick in relatively earlier for us than in other parts of Britain.

The government’s plan for businesses already addresses some of these concerns, but I’ll be pushing for a Cornish focus ahead of the budget to support local companies and build back our high streets. Because the UK can’t achieve growth if it leaves Cornwall behind.

I'd also like to see us take another look at the cliff edge that is the VAT threshold, which has not kept up with inflation, and is putting many local businesses in a stranglehold - trapped in limbo between going for growth and being too small to operate viably.

Our Labour government has shown it understands many of the problems which disproportionately affect small businesses. Among other measures, it has promised new laws to stamp out the scourge of late payments, by getting bigger firms to reveal how promptly they pay suppliers.

However, we need to ensure that its approach to small businesses is also reflective of the regions they are in. Take the business rates system, for example. This refers to rates paid on non-residential properties and Labour have pledged to replace it with a fairer system.

It is here we need to see a specific approach to Cornwall, where rental costs are already high. We are pricing shops and cafés out of our high streets like Fore Street in St Austell, leaving empty windows in lieu of energetic economies.

In any case, my main focus ahead of the budget will be what approach the government will take to the VAT threshold for small businesses. This is the amount of turnover at which a business must register for VAT.

This is a common theme raised with me by businesses across Cornwall. Over the last two weeks, I visited The Atlantic Café in Newquay, the King’s Arms in Mevagissey and the Federation of Small Businesses in Cornwall. In each of these meetings, people spoke about the impact the current VAT threshold has on their business.

After years of remaining unchanged despite inflation, the Conservatives finally raised the VAT threshold to £90,000 in April. However, this is still £20,000 lower than it should be had it kept in line with inflation.

I not only want to see this brought in line with the wider economic picture, but will also be calling for Cornwall’s unique economy to be taken into account.

Fixing this will not only boost business but will also

Of course, this is just one of many steps to get support for small businesses back on track and revitalise our towns. I’ll keep meeting with local businesses and standing up for them in Westminster until this is achieved.

Noah Law

Labour MP for St Austell and Newquay