Wednesday, March 21, 2007

The Budget - a first reaction

The biggest give-away was not the 2% cut in the basic rate. That doesn't take place until next year, and will in any case largely be paid for by the abolition of the 10% starter rate.

No, the chancellor is rewarding the section of the population most likely to vote - the over-65s. He will take more pensioners out of taxation than any other section of society.

He figures that the pensioner population, who pay a larger proportion of their income in council tax than the richest ten per cent of the population, will be mollified by reducing their income tax burden. He has not addressed the inequity of the council tax as such, nor is Tony Blair bothered. Neath and Aberavon constituencies must have a higher proportion of pensioners in poverty than most of the UK and will suffer accordingly.

In reply to a question from Ming Campbell, the prime minister acknowledged the high marginal rate paid by the poorest in our society, because of council tax. However, his only response was to point to the Lyons Commission which, if early reports are to be believed, does not consider any alternatives to council tax.

Small Business

Once again Labour shows their love of big business and contempt for small business. Corporation tax is to be cut, but small company taxation is to be raised with virtually immediate effect. This is going to hit a large number of small enterprises in this borough and adjacent areas. I am particularly concerned about the effect this is going to have on those companies pioneering green solutions to our energy problems.

We would be interested to see any other views of how this budget will affect the local economy.
-Frank Little

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