Few pre-election ‘sweeteners’ expected in budget
Chancellor of the Exchequer Gordon Brown presents his ninth budget today and his last before the general election expected on May 5.
The Chancellor is expected to pledge stiff fiscal discipline in a third Labour term of office and as such will offer few pre-election goodies for middle England.
He has said previously that the budget will “lock in” our commitment to monetary vigilance and fiscal discipline.
Mr Brown – hailed by the Prime Minister as “the best Chancellor this country has had for 100 years” – will insist his policies are on track to meet the Treasury’s self-imposed “golden rule” of balancing the ledger over the course of an economic cycle.
But first time buyers, motorists, pensioners, families and working parents are all expected to receive some good news, with £1.5-£2bn in giveaways in the Chancellor’s famous red briefcase.
Mr Brown is widely tipped to be carrying a welcome boost for first-time home buyers with a policy of raising the stamp duty threshold from £60,000 to £100,000.
For working families, the cost of childcare is likely to come down through the extension of child tax credits to help mothers return to work.
In a bid to improve the lot of pensioners, their incomes may receive a boost through increased winter fuel payments.
Mr Brown is expected to avoid raising the ire of drinkers and smokers with a freeze on any real terms increase in duty on cigarettes and alcohol.
On scientific research and development, he is expected to push for new research into how Britain’s ailing manufacturing sector can be helped to grow.
At a cost of £600 million to the Treasury, Mr Brown is expected to please savers with the tax breaks on individual savings accounts (Isas) for a further five years.
The Conservatives meanwhile expect “stealth” taxes to surge to help fill the £10 billion “black hole” in the nation’s finances.
Party leader Michael Howard is predicting tax rises today.
“But the 2002 budget, the first after the election, was their biggest tax-increasing Budget to date. The question is not will Labour raise taxes, but which taxes will they raise?”
The Tories claim Mr Brown is gunning to impose a 40 per cent tax on profits made on house sales.
Mr Brown will announce his annual budget at 12:30 GMT in the House of Commons.
