Thoughts on the Budget
23 Mar 2006
With Gordon Brown's Budget, you need to read the small print before coming to a judgement. I am still working through the small print - and the bundle of papers MP's pick up from the Vote Office is nearly a foot high, but one or two things are clear already.
The help that pensioners got last year with their council tax bill has disappeared. The real reason they got it last year was because the Government faced a General Election against a background of unrest about the council tax and in particular its impact on those with fixed incomes who were ineligible for council tax benefit.
The reason they gave was that Sir Michael Lyons had been invited to come up with a new way of funding local government and until we reached this new municipal Jerusalem, they would take the rough edges off the existing system with a £200 rebate.
After the election, Sir Michael was told to take more time and he has not yet reported. Council tax has continued to go up, but without the political imperative of a General Election, Gordon has decided to cancel the help. With important local elections imminent throughout the country, I wonder whether this was a sensible move. (Or will bad results for Labour in May hasten the departure of Tony Blair - how cynical can you get?)
Second, if Gordon thinks that raising the Vehicle Excise Duty to £210 will deter anyone from buying or running a gas-guzzler, he is not in touch with the real world. And why, if you are a socialist, put up the duty on wine but freeze it on champagne? At least some wine is grown in this country, whereas, thanks to the Trade Descriptions Act, we cannot grow champagne.
On some of the larger measures, I welcome more capital for school buildings; will some of it filter down to Abbotts Ann, whose bid last year was unsuccesful, though one of the strongest I have seen? But should some of the education generosity have been shared with health, where the situation is dire?
The modest increase to £285,000 in Inheritance Tax thresholds will not take many more houses in North West Hampshire out of a 40% tax when the owner dies; and more and more of my constituents who are by no means well off will find themselves paying 40% tax on their income.
Nor did I find the Budget speech well delivered; the middle section was actually very boring and the Chancellor had trouble holding the attention of the House. I could see Labour MP's asking themselves how Gordon's oratory would go down in the country.
Was it his last Budget? I doubt it. The Prime Minister is very resilient and determined to go at a time of his own choosing; he will not want to be bundled out by a impatient Chancellor while his administration is struggling to recover from a horrendous few weeks.
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