Chancellor George Osborne announced his second budget this afternoon at 12:30. Mr. Osborne described today’s proposals as “pro-growth” but against a difficult economic background and increased military commitments will he achieve this?
We’ll be bringing you expert analysis and to today’s budget, as well as asking you for your reactions.
The Government claim over a million Welsh tax payers will be better off with 10,000 taken out of personal tax all together.
And, for the Welsh budget there will be an extra £65 million – but how will the Assembly Government spend it?
The Chancellor called it a budget that would take us from reform to recovery.
16:45: From our political editor Adrian Masters:
For Labour, Shadow Welsh Secretary Peter Hain has just told me that the budget takes Wales backwards not forwards. He said the government should be investing to create jobs not cutting and leaving businesses to it. Also ‘You can’t dump the responsibility on the Assembly Government when massacring their budget.’
Secretary of State for Wales, Cheryl Gillan, told me that the £65m extra for Wales from spending on enterprise zones and apprenticeships in England ‘throws out a challenge to the Assembly Government’ to follow the UK Government’s example.
She says she’s spoken to First Minister Carwyn Jones already today to offer to work with the Assembly Government and the Treasury to work towards developing enterprise zones in Wales. I asked her what the response was, positive or otherwise. Her reply? ‘The First Minister said ‘thankyou very much’.’
15:55: Not everyone is happy with today’s announcement. There are concerns from many charities that the least well off have not benefited from today’s budget. Head of Oxfam Cymru, Chris Johnes, said:
“More and more poor people in this country are being forced to choose between feeding their families and paying their bills as food prices push up the cost of living and cuts in services and welfare bite.
“If we really were all in this together, the Chancellor would be working to defend our welfare system and ensure that everyone contributes their fair share to protecting public services which are particularly important to the poorest.
“A Robin Hood Tax on the financial sector that was a major cause of the current problems would enable the Government to help poor people at home and abroad who are suffering due to an economic crisis they did nothing to cause.”
15:47: CBI Wales Director David Rosser has called on the Assembly to match commitments made for enterprise zones and help for small businesses in England in today’s budget.
Mr. Rosser said it was important that pro-growth measures are mirrored in the devolved nations.
14:37: From our political editor Adrian Masters:
The political parties in Wales have begun reacting to the budget.
Plaid Cymru is claiming credit for the fuel duty stabiliser and is describing the chancellor’s decision to adopt it as a ‘coup’.
The Welsh Liberal Democrats meanwhile say the rise in the income tax threshold was down to them. It was in their manifesto.
14:25: From our political editor Adrian Masters:
It’s still not clear exactly how the Chancellor’s budget will affect Wales. Will the Assembly Govenrment follow suit, for instance, on enterprise zones and university technical colleges?
In the short term, the Wales office says spending commitments for England will translate into an extra 65m for Wales.
And according to the Wales Office as a result of raising tge income tax threshold, a further 10,000 people in Wales won’t pay any tax from 2012
14:00: The price of fuel is to be 1p per litre from 6pm tonight and a fair fuel price stabiliser brought into force.
- Annual growth forecast revised down from 2.1% to 1.7% in 2012.
- Personal tax allowance to rise by £630 to £8,105 in April 2012.
- Tobacco duty rates to increase by 2% above inflation.
- No new changes to alcohol duty beyond those already announced.
- Pay rise of £250 for armed forces, prison, NHS, teachers and civil servants earning under £21,000.
- Inflation expected to remain at 4-5% this year, 2.5% next year and 2% the following year.
- The 50p tax rate should be a temporary measure.
What are your thoughts on George Osborne’s budget? Do you feel you are better or worse off?
12:30: George Osborne: “this is a budget for making things not making things up.”
12:00: Business analyst Nick Partridge spoke to our online producer Jayne Lutwyche about what people in Wales can expect from today’s budget.
“There should be some relief on fuel duty – fuel was due to go up by 5p in April but I’m almost certain this will be scrapped or at least delayed for some time.”
“There could be news on income tax – a possible increase in personal threshold”
11:30: Our Political Editor Adrian Masters has been looking at some of the announcements expected to happen in today’s budget:
- A possible merger of national insurance and income tax. There have been a lot of hints about this and there have been many calls for it to happen over the years. It’s thought to be extremely complicated to do and throws up a number of questions such as what happens to pensioners who pay no National Insurance? And what about employer’s contributions? What’s most likely is that Mr Osborne will signal the beginning of the process.
- Income tax threshold. Last year the level at which you start paying tax was raised from £6,475 to £7,475. It’s likely to be raised at least to £8,000 in line with the coalition government’s aim of raising it to £10,000. But it’s also likely that the level at which people pay higher rate (40%) tax will be brought DOWN to pay for it.
- Corporation tax. There’s some speculation tonight that Mr Osborne has a surprise tax cut planned and that it could be corporation tax which he cuts.
- Pensions. At the moment, those whose state pension is below the minimum income guarantee (about £140) are eligible for benefits which bring it up to that level. Bringing the basic level of pension up to that level would be a way of generating good headlines and stopping those pensioners from feeling like benefits claimants.
- Fuel. As I mentioned, there have been very strong hints that the Chancellor will ease the burden on motorists by postponing or reducing the fuel duty increase planned for next month. Watch too for a possible answer to a request from the Wales Office that rural parts of Wales are included in a pilot scheme
- Cigarettes and alcohol. You can expect a 17p increase on a packet of 20 cigarettes. Look for 3p per pint on strong lagers but a possible cut in duty on low-strength beer.
- Troops. A possible £250 pay rise for 50,000 troops earning less than £21,000.
- Online CD selling. A loophole which allows VAT-free CDs, DVDs etc to be imported from the Channel Islands is expected to be closed. That could mean up to £2 extra on such online CDs.