I support the increase in the top tax rate to 50% for income over £150,000 and restricting the personal allowance for those with income over £100,000 from 2010 but this is not the sort of comprehensive change in the income tax system that I would have liked to have seen as explained here.
If this change is to be successful it will be necessary to close tax loopholes and I hope the measures announced will be comprehensive and successful. Whilst the more affluent should pay more in these difficult times, there are still too many people on low incomes paying income tax. A substantial rise in the threshold at which people begin to pay tax would have dealt with this and fully compensated those who lost out by the withdrawal of the 10p tax band.
For many years, I have argued that too large a proportion of the money spent on tax relief for pensions contributions has gone to higher rate tax payers. You can read more about my views on pensions here. The measures that were announced in the Budget represent a move in the right direction but money should be directed to improving the basic state pension and to reduce means testing in the pensions’ system.
I also support the £500m extra support for the housing industry, including £100m for local authorities to build energy-efficient housing, but I still have concerns about levels of spending on housing and made my feelings on this clear with an intervention I made during a speech by John McFall MP:
Lynne Jones (Birmingham, Selly Oak) (Lab): My right hon. Friend mentioned investment in housing. Does he share my disappointment that only £100 million is to be provided for council housing? That will secure about three council houses per constituency, and is surely inadequate, given that more than 1.5 million households are on council waiting lists and given that a large number of housing revenue accounts are paying money directly to the Exchequer—many millions in the case of Birmingham council tenants.
There were a number of other measures announced that will make a positive difference to individuals, businesses and the economy as a whole:
-The child element of the Child Tax Credit to increase by £20 from April next year.
-£100 extra for child trust fund vouchers for new babies with disabilities, extra £200 for those with severe disabilities.
-£80m extension to HomeBuy Direct – the government shared equity mortgage scheme.
-Additional £1.7bn funding for jobseekers.
-Car scrapping scheme offers £2,000 discount on new cars when vehicles over 10 years old are traded in.
-Carbon budget commits UK to reduce emissions by 35% by 2020.
-£435m extra support for energy efficiency measures for homes, businesses and public places.
-£525m new support for offshore wind power projects, intended to provide enough electricity for 3.5m households.
-£405m new funding for low-carbon technology projects.
Overall, while this was a positive Budget considering the restrictive circumstances, I believe that the Government should be going further with measures to cut down on carbon emissions; improve housing; support unemployed and disabled people; and create a fairer, more progressive tax system to reduce inequality.
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