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Sunday, March 13, 2011

A budget for pensioners and the low paid

With the budget due to take place in 10 days time, speculation is already rife as to what the Chancellor will do with an unexpected surplus of £3.7 billion. As a candidate in this May's election I obviously have an interest in anything that might counter the negative attacks on the coalition and unerline some of the good work we have done.

This morning's Independent on Sunday highlights some of the considerations that might be in the Chancellor's mind. They say that the Chancellor may use the surplus in the Treasury coffers to alleviate financial pressure on motorists, while also promising help for pensioners and the low-paid. They add that extra measures to target the banks and non-doms and raise the stamp duty threshold for first-time buyers are also being considered ahead of the Budget:

The Lib Dems in particular are pushing for the Chancellor to spell out the next stage of the policy to make the first £10,000 of earnings tax-free by 2015. In June, Mr Osborne increased the income tax threshold by £1,000 to £7,475, lifting 880,000 people out of tax altogether and cutting tax for 23 million people by up to £200 a year.

"We expect to see progress on that spelt out in the Budget," said a Lib Dem minister. To reach the £10,000 target, a key Lib Dem policy secured in the coalition agreement, would cost £13bn.

A flat-rate state pension of £140 could also be confirmed in the Budget, ending means-testing and signalling a significant victory for Iain Duncan Smith, the Secretary of State for Work and Pensions.

Additional apprenticeship places are expected to be found and Vince Cable, the Business Secretary, will insist the coalition is on the side of entrepreneurs in a speech to the Federation of Small Businesses, which has set itself against the Government's plan to localise business rates. The Budget will include £100m to boost growth in 10 enterprise zones, while the Office of Tax Simplification will outline reform of the tax system for small businesses, easing administration and reducing uncertainty.

If the Government can take the opportunity to kick-start the economy whilst helping some of the neediest in society then that would be a useful addition to the significant work that the coalition has already done.
That phrase "the surplus in the Treasury coffers" shocked me when I read it in the paper yesterday. There is still a deficit. The most you can say is that the accumulated debt is slightly less than was estimated at the time of the autumn statement. Was this misrepresentation by Independent staff or by No. 10 spinners?
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