Budget 2012: Reactions

Key players respond to today's budget
Key players respond to today's budget.

All the reactions to the Budget, from across the political spectrum.

Barney White-Spunner, executive chairman of the Countryside Alliance

"It is clear that the rural economy has been overlooked by the chancellor today. The Countryside Alliance is broadly supportive of a simplified tax system that will be of benefit to farms and small rural businesses, and the extension of mobile coverage to 60,000 rural homes, however both measures amount to little more than a drop in the ocean when it comes to reviving the rural economy.

"Rural areas are crying out for more to be done to bring fast and reliable broadband to the countryside's not spots, with major funding announced by the Government 18 months ago and very little evidence of any progress to date. Yet George Osborne announces funding for 'ultra-fast' broadband for ten UK cities, ignoring the plight of families and businesses in the countryside forced to rely on slow or non-existent broadband connections.

"But by far the biggest slap in the face for hard-pressed rural families is the chancellor's decision not to freeze the rise in fuel duty planned for this August. Drivers filling up in countryside petrol stations are already paying on average 4 pence more than their urban counterparts for every litre, sometimes rising as high as 7 or 8 pence in certain areas. The rise in duty this Autumn will force rural drivers and rural businesses to make some very tough choices about how often they use their vehicles, with potentially serious knock-on effects for the rural economy."

Dominic Haslam, director of policy and strategic programme support at Sightsavers:

"Spending on aid is effective and it works. The UK has always been at the forefront of the campaign to end world poverty. This is a legacy we can all be proud of and should endeavour to maintain.

"Although these are difficult times, the devastating effects of the global recession are being felt most keenly by those already surviving on less than a dollar a day.

"The UK government's continued commitment to spending 0.7% GNI on aid will have a huge positive impact on the welfare of the world’s most vulnerable people, including those with disabilities. We know that aid can set these people and their families on the path to a brighter, more self-sufficient future as well as alleviating suffering in the short-term where needed."

IPPR North Director Ed Cox

"We welcome the announcement of further elements of the Northern Hub plans as another important piece of the puzzle but the government isn't going far enough if we want to see real jobs growth in the North of England.

"Osborne was right to admit that there has been chronic underinvestment in transport in the North. IPPR North have previously argued that transport investment is unfairly skewed towards London and the South East and our research has recently shown that planned future transport investment in the North East is just £5 per head compared to £2700 per head in London and the South East. Investing in the Northern Hub will go some way to rebalance investment.

"We hope to see the final stages of Northern Hub funding confirmed later this year along with other rail priorities such as rolling stock and station capacity improvements: investment that amounts to just 2.5 per cent of the cost of HS2. This would create 20,000-30,000 extra jobs in the North of England and would add over £4bn to the Northern economy.

"Transport investment in the North is vital if we want to see economic growth and people coming off benefits and into employment. The link between better transport infrastructure and regional economic growth is clear. Not only does immediate investment create local jobs, but improved transport results in time savings to journeys and greater economic dynamism.

"We also welcome the announcements about Manchester's City Deal and in particular proposal to invest £1.2bn in transport infrastructure. We look forward to seeing the other City Deals and hope they are as ambitious as Manchester's.

"If the government is serious about rebalancing the economy, they need to commit to investing in job creation in the North of England which is currently being hardest hit by unemployment."

Andy Sawford, chief executive of the Local Government Information Unit

"The budget had a noticeable emphasis on the role of cities in driving economic growth, with announcements of a new ultrafast broadband deal for cities, new infrastructure focussed around cities, and emphasis on the 24 largely city based enterprise zones. It is good to hear about the City Deal for Greater Manchester, which could open the door for many more localised deals with the Treasury that help councils to innovate. Inevitably though the rest of local government will be left wondering when it will be invited to the party to agree local deals, develop further enterprise zones, and get support for ultrafast broadband.

"Planning was a key theme of the Budget and the chancellor confirmed that there will be a presumption of growth in the new National Planning Policy Framework to be announced next week. This will be a powerful way of making sure that local areas go for growth but it will need to be thoughtfully implemented if it is not to simply undermined the spirit of the neighbourhood planning approaches emphasised in the Localism Bill.

"Councils will welcome increased money for house building through the 'Get Britain Building Fund', the mention of more support for tax increment financing and for help with borrowing costs, although they will want to see the detail.

"Councils will also want to see the details on the announcement of Regionalised Pay for central government departments. Will this lead to localised pay in local government?

"The LGiU through our work with the Royal British Legion have encouraged councils to look at what more they can do to help support men and women in the armed services. Today's announcement of full council tax relief is something all councils will want to support, but we do need to know where the money is coming from, particularly as councils are being forced to cut council tax benefit by 10%."

Chris Johnes, director of Oxfam's UK poverty programme

"It is a farce to call this a 'Robin Hood' Budget when it has failed to support the poorest people in society and those who have lost their jobs.

"The chancellor is wrong to say every person on low and middle incomes will be better off. Whilst a rise in the income tax threshold will offer welcome help to many, the 'squashed bottom', those earning less than £8,105, won't feel any benefit at all.

"The suggested additional £10 billion cuts to welfare would be catastrophic for working families on low incomes and people who are struggling to find work. Rather than taking yet more money from the poorest the government should make those that caused the financial crisis pay their fair share with a Robin Hood Tax."

Charlotte Vere, founder of the Women On campaign group

"It was clear from the outset that the cliff edge was unworkable. Adding the taper between £50,000 and £60,000 makes perfect sense and it means that 90% of families keep some or all of their child benefit.

"It is also right that the chancellor has resisted pressure to make any other changes to his proposals. Now is the right time for the government to recognise that earning two incomes is FAR harder on a family than earning one, and that working mums and dads need help.

"Removing child benefit from those families with a single earner over the threshold isn't unfair - it recognises that families are different and each is capable of making the right choices for their circumstances. But keeping the entitlement in two earner households who each fall below the threshold is a small but positive step to encouraging greater participation in the workforce, particularly from women.

"This should signal the start of the government's sustained support of working parents which will continue with the changes to parental leave and flexible working to be announced soon."

Brendan Barber, TUC general secretary

"We needed a Budget that looked to the future and made jobs – particularly for young people – the national priority. Instead we have got a Budget for the rich by the rich.

"One minute the chancellor said he found tax avoidance morally repugnant, the next he rewarded it by cutting income tax for the richest one per cent – with precious little relief for hard-pressed families on ordinary incomes. Treasury figures show that those on low and middle incomes will do worse than those higher up the income scale.

"This looks like a Budget made to keep the Coalition together rather than one made for the good of the country."

Sally Hunt, UCU general secretary

"Starving education of funds, axing grants like the EMA and hiking up the cost of access to college and university, while authorising billions in tax giveaways to big business, is not the way to get us back on track.

"If the chancellor really is on the side of aspiration, he should be making access to education easier and creating a highly-skilled workforce that can compete in the high-knowledge global economy.

"The UK's future is not as a haven for companies who want to move capital and have no loyalty. Lowering corporation tax will deprive the Treasury of billions of pounds and prove once again that talk of us all being in this together is utter nonsense."

Dr Richard Wilson, chief executive of TIGA, a lobby group for the video games industry

"This is a brilliant decision by the government and terrific news for the UK video games industry. It is also a decisive victory won by TIGA through audacity, determination and endurance. Like a boxer knocked down by his opponent, we refused to accept defeat and kept getting back in the ring. This victory will benefit not just the UK games development and digital publishing sector but also the wider UK economy.

"Tax relief for the video games sector will increase employment, innovation and investment in the UK video games industry. Our research shows that games tax telief should generate and safeguard: 4,661 direct and indirect jobs; £188 million in investment expenditure by studios; increase the games development sector’s contribution to UK GDP by £283 million; generate £172 million in new and protected tax receipts to HM Treasury, and could cost just £96 million over five years. Tax breaks for games production will ensure that the UK remains at the forefront of video game development. It will also help to rebalance the UK economy away from an over-reliance on financial services towards a high skill, R&D intensive and export focused industry.

"For games tax relief to be announced in the Budget is the culmination of a four year campaign waged by TIGA. Government ministers are to be warmly congratulated for this brilliant decision. The All Party Computer and Video Games Industry Group in the Westminster Parliament, the Labour Party and the Scottish National Party also deserve full recognition for supporting this critical measure. TIGA now looks forward to working with the Coalition government, the Labour Party and the SNP and other interested parties on the implementation of games tax relief."

Gillian Guy, Chief Executive at national charity Citizens Advice

"Raising the personal tax allowance is an empty gesture to struggling families on low wages. Poorer working families who get housing and council tax benefits will not get all of the money in their pocket – because as their income goes up, their benefits will go down. The government must make sure the poorest feel the full financial impact of this raise by changing the levels of disregarded income when calculating benefits."

David O'Keeffe, chairman of the CIOT's R&D Working Group

"Most importantly, a change to an 'above the line' system would mean that the tax credit would be part of the cost calculation of an R&D project undertaken by the engineers or other personnel who are going to carry out the work, rather than being a relief which is claimed by the tax department after the event. This is likely to make R&D projects more affordable at the relevant decision making point, which should encourage R&D spend in the UK.

"We welcome, too, the chancellor's commitment to ensure that small and medium enterprises' (SME) R&D incentives are not reduced as a result of this change and look forward to being involved in the consultation on the detail. Although the drivers for an 'above the line' system are not so apparent for SMEs, we would advocate that the same system is applied for large companies and SMEs as to restrict the changes to large companies would only give rise to more complexities at the margins for growing (or shrinking) companies."

Jane Hutt, finance minister of the devolved Welsh government 

"This is a disappointing Budget and not one which will support economic growth in Wales or the UK as a whole. What we wanted to see today was a Budget for jobs and growth, with significantly increased or at least, brought forward, capital expenditure. The chancellor did neither.

"We had provided the UK government with details of a number of schemes across Wales which are "shovel-ready", but following this Budget they will have to wait – remembering that we face a 40% plus cut in our capital grants between 2010 - 2015 from the UK government.

"Not only will this impact on the construction industry and local supply chains but it will also delay key projects like road improvements and hospital improvements. Key public services for all people across Wales.

"Last year the OBR forecast growth at 2.5%, this is now revised down to 0.8% and cuts to spending deepen over the next 7 years. This will take money out of the economy and reduce living standards further.

"The lack of action on fuel duty will impact on all Welsh citizens and particularly hit hard our rural areas.

"I am also very concerned about the impact of the UK government’s austerity plans on families in Wales, and as the Fawcett Society reported yesterday, on women. This leaves us is no doubt that families are facing a big squeeze in their living standards. The prospects of a further £10 billion of cuts to the welfare budget in the next Spending Review are horrific.

"I want to reassure people that I will continue to do my very best to mitigate the worst impacts and protect the most vulnerable.

"I do welcome the announcement of Enhanced Capital Allowances in our Deeside Enterprise Zone and the additional funding for ultra-fast broadband in Cardiff. It is also welcome news that the UK government will work with the Welsh government to consider the electrification of the Cardiff Valley rail lines and will increase support for the armed forces."

"The Welsh government does not support the chancellor's plans to pay Welsh workers less than workers in other parts of the UK and we would encourage the UK government to close the gap in income between different parts of the UK, not make it worse.

"Public service workers across the UK work hard, often in difficult circumstances. Nurses, teachers and police officers should not be penalised because of where they live.

"To repeat, this is not a Budget which will meet the need of Wales' economy or its citizens. At a time when most people are being squeezed by rising prices, frozen incomes and reduced benefits, this Budget is not what the UK or Wales needs."

Robin Williamson, technical director of the Low Incomes Tax Reform Group (LITRG)

"Raising the main personal allowance to £9,205 by April 2013 will improve the finances of many on low incomes. But where households are receiving means tested benefits, the improvement may be far less than expected. And where households have already experienced cuts in tax credits and other welfare benefits, the increase in the personal allowance may do no more than ameliorate their overall loss.

"Raising the personal allowance will contribute to a simpler tax system for those on lower incomes, as fewer people will be paying tax and receiving benefits at the same time. And it is a good way of enabling people paying the basic rate of tax to keep more of what they earn.

"But for those receiving means-tested benefits, much of the benefit from the tax cut is clawed back because the less tax you pay, the higher your net income, and the less you are entitled to by way of benefits. So that someone on housing benefit and council tax benefit, for example, will see only 15% of the theoretical increase flow through into their net income."

Len McCluskey, general secretary of Unite

"This is another wasted year in what is becoming a lost decade for jobs and growth. But worse, this is a year where the poorest will be paying for the gifts lavished on the wealthy. Did Osborne learn nothing from the Thatcher years - trickle down economics do not work.

"For the almost three million unemployed, there was not an iota of hope in this Budget. They are not just forgotten, they are being condemned to joblessness. This was a Budget drawn up by a cabinet of millionaires for millionaires.

"And we need to ask, where is the money coming from to pay for the cuts to the top rate in income tax and in corporation tax? His plan to close loopholes will only take him so far.

"Raising the personal allowances will be some small relief for millions hard-pressed families – but will only amount to a meagre £4.20p-a-week, when household bills are soaring and VAT remains at 20% because of this government. Contrast that with the loving care Osborne lavishes on the wealthy and it is clear where this government's priorities lie.

"The continued drive to press ahead with regional pay will be an economic disaster for the poorest regions of the UK, cementing the North-South divide. Spending power will be drained from these areas, and siphoned off even more rapidly, if George Osborne imposes regional pay."

John Cridland, director general of the Confederation of British Industry

"Family budgets have been under great pressure, and by putting more money in the pockets of ordinary people, the chancellor has provided a much-needed confidence boost.

"The chancellor has also painted a clearer vision of how the UK will earn its living in the future and, by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he has sent a powerful signal to companies to invest, do business and create jobs in the UK.

"An extra one per cent off corporation tax this year could make a big difference to investment intentions. Plans to reduce the top rate of tax to 45p by April 2013 will show our top and aspiring talent that this government wants them to create wealth here.

"With many calls on the chancellor to spend money he didn’t have, the best news for businesses is that he stuck to his guns and delivered a fiscally neutral programme.

"If businesses were looking for more, it was in the area of deregulation. For smaller businesses, things may not feel very different on the ground. It would have also have been a huge relief if the chancellor had taken the opportunity to get rid of the currently unworkable Carbon Reduction Commitment."

Andy Atkins, executive director of Friends of the Earth

"This Budget sticks two fingers up at David Cameron's promise to build a clean future – and gives a massive thumbs down to new jobs and cutting our reliance on expensive gas and oil.

"Safeguarding our environment and growing a strong economy go hand in hand – but the chancellor has fired the starting pistol for more roads, airports and gas power that will keep the UK hooked on costly fossil fuels for decades to come.

"Business leaders are sick of the chancellor's Jekyll and Hyde routine on developing a low carbon economy – and other countries are leaving us trailing.

"The few green crumbs of comfort offered by Mr Osborne will be completely swept away by a package of policies that make this a Black Wednesday for the environment.”

"Trashing planning rules will do nothing to develop a fair and resilient economy – we need the right kind of development in the right place, with investment in clean energy and warm, affordable homes.

"Osborne says new planning rules will protect our most precious environments but unless they address the environmental challenges we all face, ministers will pave the way for a development free-for-all that will cost us all a fortune in the long run.

"Bringing in the changes will put local plans at risk and allow developers to ride roughshod over local communities."

Stephen Tetlow, chief executive of the Institution of Mechanical Engineers

"With British manufacturing growing by less than 1% in the past year we are still sorely lacking a bold, ambitious industrial strategy to rebalance our economy. This Budget contains some helpful measures but it's a vision we need, not this piecemeal approach. We're hearing the right notes, but no tune.

"Some measures announced today deserve to be welcomed. Patent and R&D tax credits will help our most innovative industries, investment in North Sea oil and gas will help our position as a world-leader in deep-sea exploration and a UK Centre for Aerodynamics will help our world-class engineers design and commercialise the next generation of aircraft."

Ryan Bourne, head of economic research at the Centre for Policy Studies

"The forecasts set out by the OBR today show that our public finances are still in a dire state, as expected. The chancellor today needed to maintain credibility to curb this increase in debt whilst fostering the conditions for growth.

"There were some very modest, but welcome tax changes. But the chancellor really needed to grant more assistance to small businesses. They are unlikely to believe the overall Budget was 'unashamedly on the side of business' when fuel duty is increasing, employers national insurance rates are so high, and business rates are going up. They will now cling to the hope that other deregulatory announcements, like planning reform, will meet the positive pro-growth rhetoric they have been given."

Anna Bird, deputy chief executive of the Fawcett Society

"The age of austerity is already having a devastating impact on women across the UK. The number of women out of work has hit a 25 year high and is still rising. Eight out of ten jobs lost in the last quarter came from women. Single mothers have seen cuts to their average income equivalent to a month's income each year.

"This budget was an opportunity to introduce measures that would tackle female unemployment and provide a boost to women's incomes and opportunities.

"But far from putting women at the heart of the economic recovery, the policies unveiled today will continue turning back time on women's equality.

"Women are typically poorer and earn less than men, but also have greater caring responsibilities. Because of this, benefits and tax credits typically make up around about 20 per cent of average women's incomes – in comparison to 10 per cent of men's.

"Not all of the £18 billion in welfare cuts announced before today have yet kicked in, but Fawcett and others research has shown clearly that these drastic cuts are having a disproportionate impact on women – some 70 per cent of the money saved through changes to the tax and welfare system outlined in 2010 alone will come from women's pockets.

"Today's budget announced plans to find another £10 billion worth of savings from the welfare bill by 2016. This will see women hit twice as hard as men and amounts to a raid on women’s pockets, pushing more women into poverty.

"Further slashing at the welfare bill in this way undermines the small increase in income many women will see as a result of the increase in the personal tax allowance threshold.

"The decision to means test child benefit marks a historic break with the previous consensus that such a benefit, typically spent directly on meeting the needs of children, should be universal. Fawcett is disappointed that the government has chosen to break ties with universality in this way. Regardless of where you draw the line, restricting who gets child benefit ushers in a new era in our understanding of the role of the state in supporting children and those who care for them. While the chancellor is right to claim that higher rate taxpayers must do their bit for deficit reduction, it is unfair that only those higher earners with children should see their incomes affected.

"Given that the government has chosen to proceed with this policy, we welcome the tapering measures introduced by the chancellor to smooth the cliff edge effect for higher earners in the withdrawal of child benefit. However, the measures announced today will do nothing to challenge the unfairness that means a couple whose combined income is below £100, 000 will lose less than a family where only one parent works earning just over £50,000.

"The government has trumpeted plans to speed up raising the income tax threshold. While this will benefit many – including many women, the changes announced today will mean nothing for those who already earn too little to pay tax - 73 per cent of whom are women. Nor will it help the 1.13 million women currently out of work whose incomes are being further squeezed through the welfare system.

"Moreover, any extra cash in their pockets as a result of this increase will be needed to plug the hole made by the incredible £10 billion pounds worth of welfare savings the chancellor also revealed today.

"With evidence mounting everyday that cuts are turning back time on women's equality, the decision to put together a budget without considering the way different measures affect men and women beggars belief. We and others have warned this government is presiding over a dramatic and dangerous reversal in progress on equality between women and men – one that is being obscured by the Treasury's lack of transparency in not publishing information about how men and women will fare, despite the legal obligation to do so.

"The equalities minister and others have pledged to put women at the heart of the economic recovery. Today's budget not only failed to set out how this would happen, but signalled a further round of dramatic and drastic spending cuts that are likely disproportionately to impact on women and add to inequality."

Matthew Elliott, chief executive of the TaxPayers' Alliance

"There is a lot of good news in the Budget for families who have struggled in the recession. The cuts in corporate and top rate taxes will improve the incentive to invest and innovate, meaning higher wages before tax. Then a higher personal allowance will mean they can keep more of the money they earn.

"Unfortunately some of the money is coming from higher taxes on pensioners; there is no relief for motorists from terribly high taxes on petrol and diesel; higher taxes on tobacco will be a boon for criminals selling dodgy cigarettes; and yet another higher rate on stamp duty is an unfortunate hike in an ugly tax. But overall this is a Budget that should ease the pressure on people's living standards and allow most of them to keep more of their money." 


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