22/06/10 - Justin Tomlinson MP Welcomes Emergency Budget

Local MP Justin Tomlinson has welcomed today’s budget statement by Chancellor of the Exchequer, George Osborne.

Some of the budgets key points to note are shown below:

• Labour left behind one of the largest budget deficits in Europe.
• In cleaning up Labour’s mess we will protect the most vulnerable, including low income families and pensioners.
• The most urgent task facing the country is tackling the deficit.
• Compared to the previous Government’s plans there is £40 billion of additional tightening by 2014-15.
• Labour’s spending plans implied a reduction in departmental budgets of 20 per cent. Given the Government’s commitments to real increases in NHS spending and protecting international aid, this budget implies that other departments will face an average real cut of 25 per cent.
• There are no further cuts in capital spending totals beyond those announced as part of the £6.2 billion of savings in 2010-11.
• However, some tax rises are unavoidable. The Government will increase VAT to 20% on January 4^th2011, but makes no changes to items that are zero-rated.         
• Support for low and middle-income earners with an increase in the personal allowance of £1,000.
• Support for pensioners – the Government will up-rate the state pension so it rises by the highest of earnings, prices or 2.5 per cent from April 2011
• An increase in capital gains tax rate from 18 per cent to 28 per cent for higher rate and additional rate. Basic rate taxpayers will continue to pay an 18 per cent rate on their gain.
• A two-year public sector pay freeze for those earning more than £21,000.
• The Government will work in partnership with local authorities in England to implement a council tax freeze in 2011–12.
• A reduction in the main rate of corporation tax from 28 per cent to 24 per cent over the course of four financial years from April 2011. 
• A levy on banks’ balance sheets from 1 January 2011.

On leaving the Commons’ Chamber following the budget, Justin commented:

“This is a tough but fair budget. It is a decisive budget that deals with the record deficit the Government inherited from Labour.

“We are now taking the unavoidable tough decisions that the Governor of the Bank of England and the G20 called for and that Labour ducked.  We will do this in a way that strengthens and unites the country. Everyone has to contribute – we are all in this together. In cleaning up Labour’s mess we will protect the most vulnerable, including low income families and pensioners.”