BUDGET 2015 - Dorset reaction to the Chancellor's pre-election announcement

With just seven weeks to go before the General Election, the Chancellor George Osborne, outlined a Budget for Britain ‘the come back country.’

Outlining his plans, Mr Osborne said that the UK’s economy grew faster in 2014 than any other advanced economy, but lower than three per cent predicted in December.

He said the government wanted to continue to push down the deficit and said the Budget was designed to ‘choose economic security, jobs, national recovery, families and responsibility.’ He said: “This is a Budget that takes Britain one more big step on the road from austerity to prosperity.”

The National Minimum Wage will rise to £6.70 an hour this autumn and austerity is likely to end a year earlier, with public spending increasing in 2019 in line with the economy.

The Chancellor has said there would be ‘no unfunded spending, no irresponsible borrowing,’ and said that today ‘Britain is growing, creating jobs and paying its way.’ He finished by saying: "This is the Budget for Britain - the come back country."

President of Weymouth and Portland Chamber of Commerce Michelle Hind said: "I would hope that businesses in Weymouth and Portland of all sizes will welcome the focus on business growth and long term economic needs.

"A reduction in unemployment, an increase in personal tax allowance and a new rail franchise for the South West together with reduced business taxes and frozen tax on petrol give a sense of fiscal responsibility which bodes well with our local businesses.

"It's slightly disappointing that some of the concrete action will be delayed until later in the year but we will be calling for these promises to be actioned after the election."

DCCI chief executive Ian Girling welcomed measures to support business but said Mr Osborne could have gone further.

He said: “Broadly speaking, the Chancellor has pulled off a tough balancing act with a strong focus on fiscal responsibility.

“Lower business taxes, the cancellation of the fuel duty increase in September, greater investment in technology and measures to put more of the new £1 coins in the pockets of the public will be welcomed in Dorset.

“It would have been encouraging to see more of an indication of an extension to enhanced business investment allowances rather than having to wait until the Autumn Statement and there was little explicit mention of support for exporters.

“The devil will be in the detail and we will wait to see how the Budget impacts locally in Dorset."

Chairman of Weymouth's Pubwatch scheme, Keith Treggiden said it was great news that beer duty had been cut by 1p.

He said: "I think it's always great news when anything like this is frozen that will benefit the local community.

"It will definitely benefit the independently run pubs in the town and make them a better profit margin."

MAIN POINTS

• Tax-free personal allowances to rise to £10,800 in 2015-6 and £11,000 the year after
• New personal savings allowance - first £1,000 interest on savings income to be tax-free
• Annual savings limit for ISA increased to £15,240 and new flexible ISAs introduced where savers can take out money and put it back later in the year without losing their tax-free allowance
• New ‘Help to Buy’ ISA for first-time buyers – For every £200 saved towards a deposit the government will top it up by £50
• Law to be changed to allow pensioners to access their annuities, with 55 per cent tax charge abolished and tax applied at the marginal rate
• Farmers to be allowed to average incomes for tax purposes over five years New tax credit for orchestras and consultation on tax relief for local newspapers
• New inter-city rail franchise for south west of England
• £25m to support army veterans, including nuclear test veterans and £75m from Libor fines to go to charities for regiments which fought in Afghanistan
• Beer duty cut by 1p, cider by 2p, whisky by 2p. Wine duty frozen
• Tobacco and gaming taxes to remain unchanged
• New ‘horse racing betting right’
• Petrol duty frozen - September’s planned increase scrapped

REACTION - BUSINESSES

SUSAN Stringer, co-owner of H Stringer Painter and Decorators in Weymouth said the decision to abolish the paper tax return was taking away people’s choice.

She said “Not everyone wants to do it online and they’re taking a choice away from us again."

Speaking on the same issue, Holly Masters of Spirare Limited accountants in Poundbury said: “The fact that may be taken away, that’s huge. From an admin point of view, that’s quite a lot of our annual work. It’s difficult to know how they’re going to implement it."

Steve Vitali, a landlord who owns several properties across Weymouth, saw the budget as a mixed bag for landlords and people hoping to buy a home.

He believes the rent-to-buy ISA is a positive step, saying: “That’s a fantastic incentive. It’s more difficult now than it ever was and I know how difficult it can be. It’s not easy to get hold of finance.

“One of the most difficult things to do these days is to get on the housing ladder.”

Mr Vitali was unhappy though that there was not an increase in the threshold of the Rent a Room scheme.

Colin Williams, who runs a discount food store on Portland, said: “People need to be able to pay their council tax and have disposable income for us to get out of this recession we’re in. They say we’re out of it but we’re not.”

PENSIONERS

YVONNE Hall, 68, who lives in Southill, Weymouth, felt that the changes to the Budget did not directly affect her personally as a pensioner on the basic state pension, but felt for those who have good savings it will make a difference.

She said: "Most of what has been said won't affect me because I've only got the basic state pension. I think that unless you are a pensioner who has got a lot of savings it is not going to make a huge difference to you. The interest rate is very low at the moment.

"I do get a small rise each year but nothing big to put into savings. For pensioners like me, who don't have a huge amount, it is not really going to make any sort of difference."

FAMILIES

MICHAEL McManus from Weymouth is a parent and a grandparent.

He said that the freeze in fuel duty was ‘good news for the family’.

However, he added that despite the rises in the minimum wage and the personal tax allowance, more should be done to help Britain recover.

He said: “They should be raising the minimum wage to seven pounds an hour.”

He also strongly disagreed with the idea that savings should be taxed at all, regardless of how much you have.

“I don’t think that they should be allowed to touch your savings, because you’re obviously saving for a reason and every time the government takes money out of your savings you’re having to put that back in.”

“Back in the day you would get your wage slip and would have your stamp duty and tax deducted and that was it.”

On the subject of the Help to Buy ISAs that are being implemented, Mr McManus called them a ‘gimmick’ that will encourage new buyers to take out ISAs but he said the government will ultimately make ‘millions if not billions of pounds profit’.

The Chancellor talked of an economic recovery in his Budget speech but Labour leader Ed Milliband said Mr Osborne had ‘failed working families’.

FARMERS

ONE of the groups which looks set to benefit from the Budget are farmers.

It was announced that farmers will be allowed to average out their income over five years for tax purposes.

This move will help farmers with highly variable yields.

Rupert Rees, secretary of the Dorchester branch of the National Farmers Union, was delighted with the announcement.

He said: “That will be advantageous to farmers.

“That’s great news, it will really help the farming community going forward.

“Sometimes they have good years and sometimes they have a rotten year so evening it out over a longer period is good.”

Mr Rees explained how with good years and bad years for produce such as milk and corn, each year can differ wildly from the next and the long term way of dealing with tax is probably the best way of doing it.

He said: “It’s a long term industry with long term investments. One year you might get a tax bill but the next year you might be struggling and you may end up losing money. It’s probably a fairer way of the industry doing its tax bill.”