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Wednesday, 21 March 2012

A budget for the millions not the millionaires

George Osborne taking two million low income earners out of taxation
George Osborne has presented his budget today. It delivers a tax cuts for millions of lower and middle income earners. The Chancellor by increasing the tax threshold to £9.205. means that over two million people will be taken out of tax altogether.  In stark contrast to what happened under the Labour party when they were in government. Gordon Brown's government hit the lowest paid with a one hundred percent tax rise by scrapping the ten pence tax rate and put them on twenty pence.

It is true that the fifty pence tax rate has been reduced to forty five pence, this is because when Labour brought it in they claimed it would raise over three billion a year, it didn't. It raised around a billion a year. By reducing to forty five pence, and closing tax loopholes, the Treasury shows the highest paid will be hit five times harder than they would of been with the fifty pence rate. 

Labour, for the record, Thoth at the mouth over the reduction of the fifty pence rate but wont pledge to re-introduce it. Rachel Reeves told the BBC "we can't make promises three years in advance" the only problem with that line is Andy Burnham told the Commons yesterday that "Labour will repeal the Health Bill" a promise three years in advance. So they can't make promises three years in advance but at the same time make promises three years in advance.

The Chancellor has also closed loopholes where people divert their earnings into companies, to avoid paying tax. The Chancellor said that tax avoidance is "morally repugnant". It is designed to stop people like, as he's admitted, Ken Livingstone did. If someone earns fifty thousand pounds only twenty five percent will be able to used to prop up a company the rest will be treated as equal. Mr Osborne has also ensured that companies buying houses to escape stamp duty will now get hit with a fifteen percent tax. 

Sticking with property the Liberal Democrats wanted a mansion tax on houses bought over two million pounds. Mr Osborne has rejected this idea but he has issued a new stamp duty threshold of seven percent on those houses bought for over two million pounds. Ed Miliband didn't mention this in his speech but then his house is only worth one million eight hundred thousand pounds so he's not affected. 

It also ensures that more films and television programmes are made in Britain by giving tax breaks to those companies making them. This lead to two jokes one from George Osborne and one from Ed Miliband, I'll do Ed's first:  "I hear they love Downton Abbey. The only problem is they think it's a fly-on-the-wall documentary." now this is funny Ed, only I didn't paste it from Hansard, its not published yet I got it from here where Harriet Harman used the same gag at Labour's annual conference. The other joke from George Osborne was "this government is determined to keep Wallace and Gromit exactly where they are" and to be fair to the two Eds, they both laughed.

The budget all is good for lower and middle income earners, it lifts two million out of tax, it hits the richest five times harder than they were under Labour. It closes loopholes to stop tax avoidance it brings fairness to property ownership, it delivers the lowest business tax rates in the world rather than some of the highest that the Coalition inherited. Its a budget that delivers for the millions of ordinary people in this country.