When the Chancellor of the Exchequer stood up to present his Budget, we already knew that the fundamental work to deal with Britain’s debts remains a priority. Under the previous government, this country borrowed itself into trouble. Now we have to earn our way out.
The Budget backs business – from the innovative, research-based, high technology companies, looking to export and become world-beaters, to the small business starting out with one or two people working in it. However, it is not just about commerce. It is also about people who aspire to do better for themselves and their families.
There are plans to reduce corporation tax for businesses which are designed to make Britain competitive with the major industrialised nations across the globe. But there is also the largest ever increase in the personal tax allowance. Across the UK, that will benefit 24 million families. In the South East, 3.3 million individuals will benefit. The personal allowance increase to £9.205 will lift 244,000 people living in the South East out of income tax altogether.
The goal is to lift the personal allowance so that people earning £10,000 will not pay tax.
Child Benefit will remain in full for all families with wage earners on £50,000 or less. It is right that better-off families should contribute to reducing the deficit. There should not be a “cliff edge” between receiving child benefit and not receiving it, so the withdrawal will be gradual. Overall, 90 per cent of families will qualify to receive child benefit.
The Chancellor pointed out that the top rate of income tax is not to be reduced while the public sector is in a pay freeze and so there will be no change until 2013. Meanwhile, there are measures to reform and simplify the income tax system. That includes plans for taxpayers to receive a Personal Tax Statement. This would set out in detail what income tax and national insurance payments they have paid – and how this contributes to public spending.