Thursday, 13 March 2008

The Darling Budget - Winners and Losers

My impartial and simple summary of the budget. Cutting thru all the political non sense, also having lived in Scotland I am fluent in the language which is handy as the last two chancellors and most of our cabinet are Scots.

Losers first - the usual suspects:

1. Smokers: Cigarettes up 11p a packet (no surprise as the budget was on National No Smoking Day)

2. Drinkers: Wine up 14p a bottle, spirits up 55p a bottle, and 4p on a pint of beer. It also announced a 2% above inflation increase on alcohol duty for the next 4 years. Sobbering!!

3. Car Drivers: Chelsea Tractors and eco unfriendly cars are targeted with a major reform to the vehicle excise duty in order to reduce carbon emmissions - some claim this to be a green envy tax more than a green environental tax. From 2009, the lowest carbon polluting cars will pay no road tax in the first year, and as this has to be paid for, there will be a new higher rate for the highest carbon polluting cars. Fuel tax will rise by 5p per litre, and funding is planned for a road pricing project to tackle conjestion. He did mumble on about posponing a 2p rise in fuel tax from April to October (6 months) ... thank you Alistair. Remember that he has had an awful lot of extra tax recently due to the record high levels of fuel anyway. A cannie boy.

Winners - no surprises

1. Pensioners: Increase in Winter Fuel Allowance by £50 for the over 60's (£200 to £250), and over 80's get an increase of £100 (£300 to £400) Generous as this seems, pensioner lobby groups have called for more because of the huge hikes in charges by the energy companies. In fairness the Chancellor did say he wanted to see better pricing from energy companies for the most vulnerable - but did not back it up with any action.

2. Families claiming benefit: From October 2009, families on benefit will be better off working, becaused of planned changes to the eligibility standards for council tax and housing benefit. He also announced an increase in child benefit to £20 a week from April 2009, with an extra £17 a week for poor families with one child.

3. Savers with low incomes: The Treasury pilot scheme of "Savings Gateways" which assist people who have not been able to save because of their very low incomes will be expanded nationally in 2010. In this scheme the Government will match fund what low income savers manage to save.

4. Gift Aid: The Government will maintain Gift Aid at 22% in April, despite the fact that the Basic Rate of tax will fall to 20% (announced last year).

5. Key public sector workers: those who buy Government supported 'affordable' housing schemes will not pay Stamp Duty until they own 80% of their home. This will be very few people. Shame he did not help the millions of first time buyers, who thanks to the Northern Rock disaster have much tougher lending criteria.

.... most of you reading this blog!!

The Budget will leave many council leaders scratching their heads over how to deliver better services with less money, according to the Local Government Association. Its chairman, Sir Simon Milton, welcomed the announcements of more money to deal with child poverty and the focus on green issues, but he said Alistair Darling had given little to local authorities.

Sir Simon said, “At first look, the Budget gives little relief to town halls struggling to balance the books. Many council leaders will be scratching their heads as they try to work out how they will deliver ever better services for local people with less money than in recent years and with greater demands on services.”

Responding specifically to the Chancellor’s announcement on sites for 70,000 new homes, Sir Simon said local authorities needed assurances that enough money would be made available for the roads, schools and hospitals that would be needed to ensure the new developments were places where people wanted to live rather than desolate dormitories.

The Association’s vice-chair, Sir Jeremy Beecham, said the measures to reform Council Tax benefit would be an important step towards targets on child poverty but more needed to be done, given that 1.8 billion pounds of the benefit goes unclaimed each year. “This is a positive move, but there are further proposals that councils could work with the government on to improve take-up,” Sir Jeremy added.

In the wake of Mr. Darling’s moves to encourage energy companies to reduce tariffs, the LGA also repeated its call for every home in the country to be insulated as a way of dealing with fuel poverty. Councillor Paul Bettison, Chairman of the LGA’s Environment Board, said power companies were making eye-watering profits at the expense of families.

Finally the LGA supported the announcement of new funding for the development of road pricing technology but said pricing could not be considered in isolation. Its Transport spokesman, Councillor David Sparks said ministers had to loosen their grip and devolve transport funding and powers to local authorities.

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