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12Mar08

BAD NEWS BUDGET

Regrettably this is a bad news budget. The Chancellor is penalising families when they are already struggling with the rising cost of living and an economic slowdown.

Chancellor Alistair Darling has added £110 a year extra to every family’s tax bill. The tax take for the Treasury will be £2.8bn a year higher by 2010 – and if benefits are excluded, £4bn a year higher.

The new taxes announced in Wednesday's budget add up to £1.6bn extra on drivers, and £1.7bn on businesses, and £1.5bn on all alcoholic drinks over the next three years.

Not only are taxes up though, borrowing is as well. Taxes and borrowing are up because the Government failed to use the good years to save a little for the bad. After fifteen years of global growth, Britain has the worst budget deficit in the developed world.

Even with the additional taxes imposed on family's, borrowing will still be up £20bn over the next four years, £7bn next year alone.

The Government's lack of economic prudence is coming home to roost but it is the taxpayer who will pay the cost.

What we would do

Reduce taxes on families, by abolishing Stamp Duty for first-time buyers on homes up to £250,000 and raising the Inheritance Tax threshold to £1m.

Share the proceeds of growth to help restore public finances to a sustainable position.

Fight child poverty by abolishing Labour's couple penalty in the tax credit system.

Not introduce more stealth taxes. Any green taxes should be used to cut taxes elsewhere, not as an additional source of revenue for the Government. When it comes to alcohol, a Conservative Government would implement a targeted revenue neutral tax package on alcopops and super-strength beers and ciders, rather than hitting responsible drinkers. Labour's budget is introducing an across the board 6% alcohol tax increase – significantly above the 2% inflation rate. Conservative proposals for a revenue neutral tax on problem drinks would only effect the minority problem drinks, not the responsible majority.