Mike's Columns in the Portsmouth News
Disappointment with tired Pre-Budget Report was a missed opportunity!
Due to the economic recession, last week’s Pre-Budget Report was of great importance. But unfortunately it was a real let-down for those of us who wanted help for hard-working people and a fairer Britain. The poorest 20% of people in Britain will still pay a greater proportion of their income in tax than the richest 20%. That is because the very wealthy benefit from generous tax breaks and loopholes. Last week the Chancellor could, as I have pressed for, have closed these and given a tax cut of £1,500 a year to those on average earnings.
However, he did none of this but amazingly went in the opposite direction and is set to increase National Insurance which will mean those earning over £19,000 a year will be worse off.
What he did do was make a temporary cut in VAT that will only last 12 months and which, for example, only means a £5 cut in the price of a £220 imported flat-screen television or a 50p cut in a £25 restaurant bill. In contrast, putting £1,500 directly into people’s pockets through an income tax cut would have meant people could decide how to spend the money themselves and would have boosted consumer confidence more. Many things such as food, housing costs and other essentials do not attract any VAT anyway.
The Chancellor could also have boosted the building of homes by councils and housing associations. There was a once in a lifetime opportunity to do this with land prices having fallen and spare capacity in the construction industry, not too mention long waiting lists. But it also did too little on this.
I wrote to the Chancellor ahead of the Report urging more support for small businesses as they are the engine room of future growth and employ 13 million people. So the measures to support small businesses were welcome. But many firms are telling me that their banks are not treating them fairly so the Government really must ensure they do.
Hopefully recessions do not last for ever but last week, unfortunately, Brown and Darling missed a golden opportunity to do much more to help ordinary people.
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