Bridget Fox's reaction to the Budget: mean not green (Islington Liberal Democrats)

Islington Liberal Democrats <Islington_ld@cix.co.uk>

Bridget Fox's reaction to the Budget: mean not green

March 27, 2007 6:01 PM

Gordon Brown's last budget hit the headlines with the last minute announcement of a 2p cut in the basic rate of income tax. But beyond the hype there are big missed opportunities - and a tax rise for small businesses and the poorest tax payers.

By abolishing the 10p tax rate, Gordon Brown has doubled the starting rate of tax, hitting the poorest taxpayers hardest. Anyone earning less than around £15,000 - including part-time workers and people on small private pensions - will actually pay more in income tax now. Lib Dems favoured abolishing the 10p tax rate as part of our Green Tax Switch: but we would have raised the thresholds to take those tax payers out of tax altogether. Whereas Gordon Brown has simply pushed them into the 20p band.

Gordon could have announced the end of the hated council tax. Instead, it will not be abolished, just tweaked at the edges, with new lower & higher bands; and that's dependent on a revaluation that the Government has already said it won't contemplate until the next Parliament.

And while the Government is cutting the corporation tax paid by firms with annual profits of more than £1.5m, there is actually a rise in corporation tax for small businesses.

While there are tax breaks for the handful of homes which are carbon-neutral, the Chancellor failed to take up longstanding Lib Dem policy of cutting VAT on home improvements to improve energy efficiency. With 75% of the houses we will have in 2050 already built, that is the best way to really make an impact on people's carbon footprint AND help tackle fuel poverty.

The extra money announced for education is welcome, but the real terms increase, at 3%, will be lower than in previous years - and in any case it will be eaten up by plans to raise the school leaving age.

Gordon the showman may have proved he can spin as well as Tony. But behind the tricks we have tax cuts paid for by the poorest taxpayers; big business breaks funded by hitting small firms hard; and older people in older houses facing ever-rising council tax and fuel bills.

This is a Budget that is mean, not green.