Brown set to help first time buyers
Political Editor Graham Dines predicts help for pensioners and first time buyers will feature in Chancellor Gordon Brown's election build-up BudgetBUDGET Day is always a great Parliamentary occasion, even though much of the gloss has been taken off in recent years with the Chancellor's Autumn Statement and the three-yearly Spending Review.
Political Editor Graham Dines predicts help for pensioners and first time buyers will feature in Chancellor Gordon Brown's election build-up Budget
BUDGET Day is always a great Parliamentary occasion, even though much of the gloss has been taken off in recent years with the Chancellor's Autumn Statement and the three-yearly Spending Review.
These help make the Budget more easy to predict, especially as most newspapers seem to end up correctly speculating just what will be told to the House of Commons. As Braintree Labour MP Alan Hurst remarks: "The era of gasps of surprise from MPs listening to the Chancellor's announcements are no longer with us."
The Budget is meant to be the most secret of all Government documents. The Chancellor goes into purdah, refusing to break cover for fear of information on his fiscal planning being accidentally given out.
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Leaks on what the Chancellor intends could play havoc on the money markets.
But that doesn't seem to prevent what look suspiciously like selective details being given to newspapers.
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The tabloid headlines of increased duty on fags, booze and petrol are no longer the Chancellor's main concerns. A stable economy, prudently managed to prevent a return to boom and bust and runaway inflation, is far more important.
Yes, petrol is likely to go up by 2p a litre, beer by 1p a pint – it could be more if the Government is really serious about tackling alcohol abuse and drunken behaviour – and cigarettes by at least 10p a packet of 20.
But two announcements are far more likely to influence voters than hiking up cigarette prices – after all, if you can't afford to smoke, then kick the habit.
The first concerns pensions. It's almost certain that the growing army of grey voters will see their state benefits increase by 2.5%, which is more than the rate of inflation.
Given the anger from pensioners at recent rises in council tax – who will ever forget Suffolk county council's 18.5% rise last April? – Gordon Brown has to act to try to restore the spending power of the pension. A married couple is likely to see an extra £3 a week in their benefits.
This week's announcement of an increase in the minimum wage for 16 and 17year-olds to £3 an hour underlines the Government's determination to lift more people out of poverty – a central thrust of all Gordon Brown's Budgets since 1997.
First time buyers who have been cruelly hit by the soaraway prices of homes will be given help to get on the housing ladder. Stamp duty will not be payable on the first £120,000 of the price of property, which will save buyers £600.
Mr Brown may try to claw that back by putting a premium duty on housing transactions over £750,000 – if you can afford to spend that much on a home, then you can stump up a little more on stamp duty.
A report on Britain's volatile housing market is being published tomorrow and a rise in duty on high-priced house sales could be presented as a calming measure on current price increases.
However, with Mr Brown committed to keeping income tax unchanged and unlikely to repeat last year's increase in National Insurance, Government borrowing is set to continue to rise.
Even so, optimism will be the Chancellor's message to the nation. Gloomy talk of a black hole in his finances will be dispelled as he invests in the key public services to carry on spending to safeguard hospitals and schools.
He will contrast his upbeat message with Tory plans to axe public spending, even though Shadow Chancellor Oliver Letwin insists they pose no threat to front-line services.
Braintree MP Alan Hurst believes increases in child credit – another element in the anti-poverty drive – will be a central plank in Mr Brown's speech.
"I believe Gordon Brown will continue to follow a cautionary path, although with the nation's borrowing ratio at a record low, he could afford to be more adventurous if he thinks it wise."
West Suffolk Tory Richard Spring will be in his usual place on the back row of the opposition benches to hear what the Chancellor has to say. "I think Gordon Brown is in quite a difficult position because the nation's finances are deteriorating.
"Britain has a staggering trade imbalance – a deficit of £4.6billion would normally be covered by inward investment into the United Kingdom, that has slowed down of late.
"The Chancellor will do very little – I am expecting a neutral Budget because we won't put general taxes up because of the looming election," said Mr Spring. "Perhaps there will be an extra levy on the higher end of the property market to cash in on house price inflation."
Until the recent reform of MPs' working hours, the Chancellor always got on his feet at the despatch box at 3.30pm on a Tuesday. Now it is at 12.30pm on a Wednesday, immediately following the theatre of Prime Minister's Questions.
The Speaker's chair will be occupied for the speech by the Deputy, Sir Alan Haselhurst, Conservative MP for Saffron Walden, whose official title is Chairman of Ways and Means. By tradition, the Speaker does not officiate in debates on fiscal and revenue matters.
Forget the booze, fags and petrol headlines immediately the Chancellor sits down. Wait for the small print of the speech to be analysed for the real meaning of Gordon Brown's words.