Commenting after the statement he said, “Under inspection, often the gloss starts to come off certain announcements, and when the detail is investigated the rhetoric about this being a Budget for growth may not live up to the hype.
The Government’s desire to get people into work is welcome, but that is counteracted by the fact that the take from personal income tax will increase by 12% over the next two years as people are dragged into the tax regime because allowances remain unchanged. That is hardly an incentive to work.
Similarly, whilst the Government is offering £9billion to incentivise businesses to invest, the OBR forecast says the increase in Corporation Tax will take off twice as much as the allowance given to attract investment.
Overall, in the next two years, tax receipts will go up by 10% at a time when there is predicted to be negative growth in one of those years and only marginal growth in the other.
The Government’s proposals around childcare were among the most heavily trailed in advance of the statement, reflecting the pressure childcare places on the finances of many families. Whilst the proposals will help, a better approach would have been to increase the Tax-Free Allowance for childcare. That would not only offer more flexibility in the system but also offer assistance to a much wider group of parents.
There are some areas to be welcomed, such as the commitment to increase spending on defence and the decision to freeze fuel duty again. Scrapping the increase in fuel duty not only removes an inflationary pressure but helps businesses and consumers, particularly in regions of the UK like Northern Ireland which are more heavily dependent upon road transport.”