Budget measures too little, too late

THE Chancellor scrapped the petrol tax rise, cut the price of a pint of beer and found billions of pounds to help people get mortgages,

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Chancellor accused of piling more misery on poor
Chancellor accused of piling more misery on poor

However, he was accused of missing key targets and piling even greater misery on the poorest with more spending cuts.

In the Budget, George Osborne announced money for building projects and revealed his big idea of a 'Help to Buy' scheme, providing £3.5 billion for shared equity loan deposits of up to 20% for first time buyers of new homes to help people get on the property ladder.

The income tax threshold will increase in April next year to £10,000, a year earlier than planned, which he said would take three million of the lowest paid out of income tax completely.

There will be tax free childcare vouchers to cover 20% of the first £6000 for every child from 2015, but the public sector pay rise cap at 1% remains.

After he delivered his fourth Budget, Mr Osborne said: "This is a Budget that doesn't duck our nation's problems. It confronts them head on. It's a Budget for an aspiration nation."

While the cash for infrastructure was welcomed, it has been criticised as insufficient , with claims it would be outweighed by more cuts.

The Chancellor said there would be an extra £15bn for new road, rail and construction projects by 2020, starting with £3bn in 2015-16.

He said: "By investing in the economic arteries of the country we will get growth flowing to every part of the country."

The infrastructure projects mean consequentials for Scotland of £55m in 2013-14 and a £121m increase in 2014-15 for the Scottish Government to spend as it sees fit.

However the cash has been paid for from increasing departmental spending cuts, which will also hit Scotland.

The Scottish Government and union leaders said it was not enough and was taking too long to deliver.

Scottish Finance Secretary John Swinney said: "The Chancellor set out a number of measures which will not come into force until 2014 or later. Some of these steps are welcome but decisive action to stimulate growth is needed now."

Graeme Smith General Secretary of the STUC said: "The measures announced today are wholly insufficient.

"Funding this investment through additional spending cuts dilutes any stimulatory effect and the programme is in any case much too small.

"Given that any consequentials to Scotland will at least partially be offset by spending cuts, the STUC expects any stimulatory effect to be insignificant in economic terms. However the additional pain for those affected by the cuts will be very real."

Anas Sarwar, Glasgow Central MP, said: "This Budget will do little to help hard pressed Glasgow families. While the Chancellor has announced some much needed investment on infrastructure projects, he has financed this by even deeper spending cuts, continuing to punish the poorest and most vulnerable in our communities.

"One week before he gives a £40,000 tax cut to millionaires, the Chancellor has used his Budget to make millions pay more so that millionaires can pay less.

"While big business and top earners get tax cuts; Glaswegians will get the 'bedroom tax', and falling living standards."

There was good news and bad news for the drinks industry as beer prices were cut, but whisky and other spirits and wine will still see a planned annual price increase.

Mr Osborne scrapped the tax escalator on beer, and cut the tax on a pint by 1p from Sunday, but maintained the 2% above inflation increase on all other alcohol and cigarettes.

The Scotch Whisky Association said it was an "attack".

Gavin Hewitt, chief executive of the SWA, said: "This is an unfair and incomprehensible attack on the Scotch whisky industry in its domestic market, where it is a vital part of the Scottish and UK economy and where it supports many other businesses.

"It penalises drinkers who like a dram rather than a pint. There is no justification for spirits being taxed more heavily than beer."

Mr Osborne opened his speech by running through economic forecasts and said growth for this year was 0.6%, half of what he predicted in December, and admitted borrowing, at £114bn, was £6bn higher than he had predicted.

However he said it was predicted to fall in the coming years.

The percentage of debt as a share of GDP is set to increase from 75.9% in 2012-13 to 85.6% in 2016-17.

stewart.paterson@ eveningtimes.co.uk

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