Good Budget if you’re a millionaire

HAROLD Wilson once famously said that a week is a long time in politics.

It certainly seems a long time ago since George Osborne, the Chancellor of the Exchequer, stood up in the House of Commons to deliver his third Budget.

It was a very political Budget, in that rather than focus on Britain’s economic requirements, the Chancellor chose to give to some people and to take away from others.

Who would be the winners and losers reflect the Chancellor’s priorities at the present time. In terms of economics, this Budget didn’t much alter the course that was set in George Osborne’s first Budget back in 2010.

It was then that the Chancellor set Britain on a course of the most severe public finance reductions any developed country has ever attempted.

The course set then remains, subject to a few tweaks: the pain is expected to last longer, well into 2016-17, and will be slightly deeper, certainly in terms of planned public sector cuts in the next Parliament.

The Chancellor’s economic growth forecasts have had to be slashed over the last two years, to some extent because of the Eurozone crisis and the high oil price, but also because the Chancellor’s economic policy is focused more on deficit reduction than on economic growth and cutting unemployment,

The frightening thing is what will happen in the next few years. The Chancellor front-loaded many tax rises that he wished to introduce into the first half of this Parliament, but that means that the public sector spending cuts have been postponed into the period 2013-2017.

In the first two years of this Budget we have only seen about 12 per cent of the public sector cuts that the Government plans to make.

In terms of the impact that cuts have already had on Hartlepool, it is very evident that the town is feeling the strain. I’m afraid that this will get a whole lot worse, with enormous social and economic consequences.

So much for the big picture stuff: how will the Budget affect you?

You’ll pay more for your Greggs pasty or sausage roll, because the Chancellor is putting VAT on them.

If you are a smoker, you’ll pay an extra 37p on a packet of fags.

If you are a hard-pressed motorist, already wincing at paying almost 140p a litre at the pumps, expect it to get worse – the Chancellor said that he couldn’t afford to cancel the planned three pence rise in duty coming in August. I think many families will decide he couldn’t afford not to.

But the most astonishing thing was the groups the Chancellor decided to take from in order to give a tax cut. A family, with children, earning about £20,000, which is not untypical of many households in our town, will lose about £253 a year, on top of the extra £450 they have to pay because of the VAT rise last year.

You will also have seen the so-called “granny tax”, where the extra tax allowance given to people over 65 will be frozen indefinitely until it coincides with everybody else.

This will hit about 4.5 million pensioners to the tune of about £83 a year, whilst people who were born in 1948 and turn 65 next year are forecast to lose the most – about £325 each year.

While doing this, the Chancellor cut the top rate of tax on people earning over £150,000. This will mean that people earning £1m or more will get a tax cut of over £40,000 a year.

Every Budget is a question of balancing acts and priorities, of winners and losers.

There was nothing in the Budget to sort out Hartlepool’s unemployment problem, particularly youth unemployment.

There was nothing to assist this part of the world become more productive and efficient. There was nothing to help families who are really struggling.

But you have done OK if you are a millionaire. I think those priorities are all wrong.