There was some cheer for beer drinkers and taxpayers in chancellor George Osborne’s budget today, but it was delivered under an economic cloud where the year’s growth forecast was slashed in half.
The chancellor said the country’s recovery was taking “longer than anyone hoped” when he announced a forecast of 0.6 per cent, down from the predicted 1.2 per cent.
But September’s planned fuel duty rise has been scrapped and a planned 3p rise in beer duty tax was also axed and replaced by a 1p cut on a pint.
And the chancellor brought forward a rise in the personal allowance to 2014, meaning no income tax is paid by anyone on the first £10,000 of their earnings.
He also announced a new employment allowance which will take the first £2,000 off employer National Insurance bills for every company in the country.
The Government will also set aside £130bn for a five per cent mortgage scheme, for people who can’t afford a big deposit. It will be available from the start of 2014, for three years.
Osborne said: “This is a budget for those who aspire to work hard and get on.”
But Labour leader Ed Miliband said: “This is the chancellor’s fourth budget but one thing unites them all - every budget, he comes to this house and things are worse not better for this country.”
Northampton North MP Michael Ellis said the budget was good news for his constituents.
Mr Ellis said in Northampton North, 406 more people will be paying no tax by April 2014, and 33,848 people earning between £10,000 and £35,000 will benefit from the increase in personal allowance.
He said: “This budget rewards those who aspire to work hard. It is excellent news for people in Northampton North, particularly some of the most disadvantaged people.
“The £10,000 personal allowance is the headline as far as I am concerned. Families will be paying £700 less income tax than under Labour.”
Northampton South MP Brian Binley praised the budget, but said some of the measures in it were “better late than never”.
He said: “Times are hard and this budget outlines that. We are in the worst economic situation in Western Europe that we have seen in a long time.
“I’m delighted with the proposals for people who want to buy a house to be able to get a five per cent mortgage. I’m delighted at the measures for small and medium-sized business and I’m delighted we now have the lowest corporation tax rate of any country in the world.
“I’ve been a great supporter of pubs as they are our most important social resource. I hope getting rid of the beer duty escalator will help them.
“The chancellor had so little room to manoeuvre. There is not a great deal more he could have done. But I would argue he should have done this two years ago.”
Paul Tyrrell, landlord of Behind The Bus Stop in Wellingborough Road, Northampton, said: “The scrapping of the beer duty escalator is great news for pubs and brewers. It’s been a tough few years for the industry so it’s a welcome relief to actually be on the receiving end of some good news for once.
“People do still want to go out and enjoy a pint but there needs to be an incentive for them to do so. A cut in the price of a pint, no matter how small, certainly helps. It will help get people through the door and it should be good news for local breweries too who will benefit from the abolition of the beer duty escalator.”
Northamptonshire UKIP MEP Derek Clark was less positive about the budget.
He said: “It included one or two tax cuts or freezes as a ‘PR’ exercise, while the interest free loans for house hunters sounds good and will probably be popular but it only puts off the evil day for the family.
“Worse than that, it locks up revenue for five years - millions of pounds unavailable - so how does the Government intend to fill the hole? Another burden on the taxpayer at large?
“The chancellor said he was building on his previous budgets and the economy has begun to recover as a result. If so why is growth now predicted to improve by only 0.6 per cent, when he said previously it was due to rise to 1.2 per cent?”
“But he is at last adopting a UKIP policy, in part, a £10,000 tax threshold but why does he not take that forward to another UKIP policy - the abandonment of the employer NI contribution rather than a £2,000 starter threshold?”