MP warns budget means £110 extra taxes on families across Basildon District

John Baron MP has delivered his verdict on the Budget, which sets out the Government’s plans for taxes and public spending over the coming years. He claims the tax take will be £2.8 billion a year higher by 2010, equivalent to £110 for every family.
John said:
“ Taxes and borrowing are up because the Government failed to use the good years to prepare for the bad years.

“Tax Freedom Day – the day on which British taxpayers stop working for the Government and start to keep the money they earn – has already moved back to 1st June, compared to 27th May in 1997. It now looks set to slip back further.”

Summary of issues highlighted:
Drinks:
The Budget has announced a six per cent increase above the rate of inflation in all alcohol duty rates to come into effect on 17 March 2008. Duty rates will then rise by two per cent above the rate of inflation in future years. This will raise an additional £1.2 billion in taxes over the next three years. He points out that this levy does nothing to target problem drinks – such as alcopops, strong beer/cider and fails to encourage people to switch to low alcohol products.

Pensioners:
The Winter Fuel Allowance has been frozen for the last five years, at a time when the average fuel bill has risen by 60 per cent in the last 4 years – with the average bill up from £572 in 2003 to £924 now. Although the Allowance rises slightly, this is only for one year

Housing:
Council tax receipts are due to rise by 5.1% which is equivalent to another £1.2 billion a year, whilst failure to address the growing burden of stamp duty on first-time buyers means a typical first-time buyer is unable to afford an average house in 96 per cent of all towns. None of the thresholds for the 3 per cent or 4 per cent stamp duty bands (£250,000 and £500,000 respectively) have been increased since their introduction, despite rising house prices. As a result, more and more homes are being dragged into the higher stamp duty brackets every year.

The Motorist:
He points out that the Budget reaffirms Government plans for a national road pricing tax, despite 1.8 million people signing a Downing Street petition against the new charges.
Vehicle Excise Duty tax rises on larger, family cars is fifty times larger than the tax cut on the smallest clean cars. The tax cut for clean cars is £15 million, while the tax rise for polluting cars will rake in £735 million a year by 2010. Is this really a 'green' measure or a money-making one masquerading as green?

Income Tax and NI Contributions:
Independent experts at the Institute for Fiscal Studies have calculated that 3.5 million families will be worse off as a result of the tax changes.
From April 2009, National Insurance Contributions will increase again as the upper limit for paying the 11 per cent rate will rise to the same level as the top rate income tax threshold. The overall impact of income tax/NIC changes will cost working families over £300 million a year.