IT IS a make or break budget to lift the country out of its worst slump since the Great Depression of the 1930s.
Chancellor George Osborne will tomorrow unveil his fourth Budget – with the clock counting down to the next General Election, which must be held by 2015.
We'll have live coverage of the budget on this website tomorrow.
It will be a chance to restore faith among Hampshire voters in the handling of the nation’s struggling economy and finances. But, more importantly, many economic experts claim the contents of the iconic red box will decide the destiny of our stalled economy.
Last night it was predicted that Mr Osborne will be forced to reveal a downgraded growth forecast and a £8 billion borrowing overshoot.
With the UK teetering on the brink of a triple-dip recession and the country’s once-cherished AAA credit rating lost, he faces rising demands to abandon his Plan A, that is tackling the nation’s giant deficit.
But the Chancellor believes that failing to tackle the debt and deficit problems could leave the UK on the brink of a crisis like that in Cyprus.
He said tomorrow’s Budget would contain measures to help those who aspire to work hard and get on but would also set out the scale of further curbs on public spending from 2015. He indicated there would be help with the cost of childcare and announced that a £72,000 cap on the amount people must pay for social care would be brought forward to 2016.
The £144-a-week single state pension will also be introduced a year ahead of schedule in 2016.
He has also backed plans put forward in Lord Heseltine’s growth report to give local communities and businesses a greater say on how money is spent in their areas.
But on his central aim of restoring the nation’s finances Mr Osborne said there was “no miracle cure” and “painstaking work” was required.
He is also tipped to announce extra investment in house building and road projects – called for by leading business groups – and help for people to buy homes.
Last year 37p was slapped on a packet of cigarettes. Expect more of the same.
Another easy target is alcohol.
Mr Osborne has been tipped to defy calls by the struggling pub trade for a freeze on the so called “beer duty escalator”. Since this escalator was introduced in 2008 duty has risen by two per cent above inflation every year but in that time beer duty has risen by 43 per cent.
RETIRED accountant Anthony Putnam from Southampton says his sums are not adding up because of huge petrol and food price hikes.
The 73-year-old said: “I would like to see tax dropped on the state pension.
“Pensioners are much harder up than in the past with all the austerity and price rises. They
don’t have money to spend – some are going without heating and food. But if the state pension was taken out of the taxation system like other allowances then pensioners would go out and spend and help the economy.
“The Government would lose through taxation but pensioners would be likely to spend their extra money because they don’t have job insecurity to stop them spending. This would help stimulate the economy."
SOUTHAMPTON City Council leader Richard Williams said: “I want a change in the way central
Government determine the formula for funding local government – that would be top of the list.
“At the moment the cuts introduced by the Tory-led government fall disproportionately hard on areas with greater need like Southampton.
“For example, from Department of Communities and Local Government’s own figures the cuts to
Southampton in 2013 to 2014 are about £146 per household, while in Winchester they are only
£2. Tunbridge Wells seems to actually get an increase. This is totally unfair.
“I also want to see more incentive for growth, especially in those parts of the economy that, even during the recession, are growing.
“The best example is the green economy, which grew by five per cent last year, even though the economy as a whole at best flat lined, at worst shrank by quite a bit. Incentives or the knowledge economy and creative industries would be of significant benefit to Southampton.”
ANGELA Chicken, a 50-year-old mum of one from Southampton city centre, who works part-time in a children’s centre, said: “I am hoping George Osborne will not carry out more attacks on people on benefits – but I am not holding my breath. I don’t see why the poorest people in the
country should pay for the banks’mistakes.
“I would encourage more childcare, so people could actually get to work when they need to and I would support credit unions and community groups that have been shown to help turn around economies and rebuild local communities.”
“I don’t expect to see anything positive out of the budget. I think it is the thin end of the wedge and we all know more cuts are to come. The Government tells us we are all in this together and then cuts investment that helps those at the bottom have a stake in our future. I am disgusted at the pressure on disabled and dying people to work, the closure of community groups and charities and appalled that we are losing libraries and youth clubs.”
YOUNG families across Hampshire want something done about rocketing household bills. This has forced dad Baljinder Singh from Eastleigh to work extra hours to make ends meet, when all he wants is to spend quality time with his two young children, Yuvraj, four, and Amrat, two.
Baljinder, 32, said: “As parents we just want to enjoy bringing up our children and give them the best start in life, but when I’m having to keep asking to work for extra hours just so we can pay the mortgage, they don’t always have them available and when they do it’s at the expense of quality family time, like being there to take kids to the park or a bedtime story.”
His wife Pushwinder, 30, said: “Balancing the family finances has never been more difficult than it is now.
“I feel like this current government doesn’t understand or care about young, hard working families but only cares about the super rich.
“Both my husband and I work – but with the cost of living going up by the day it seems we are having to work even harder for less.
“Why are millionaires getting tax breaks when after working so hard and more hours I’m left
with nothing at the end of the month? I want the Government to help with childcare costs so that I can afford it. I want to be able to have enough money to sometimes treat my kids or put some away for their education or a rainy day – not have to spend it on increased costs of petrol or rising energy bills.”
IAN Lockwood, commercial director at Taylor Made Computer Solutions, which employs more than
120 staff at its Fareham base, said: “I would like to see the Chancellor look to the technology sector to help deliver his cost cutting agenda without having to cut services.
“In our work we have seen how a range of modern techniques have improved efficiency and costs across the public sector – from local authorities to the National Health Service and there’s a long way to go down this road. Any incentives he can offer that would encourage take-up would be money well spent.
“The roll out of high-speed broadband is another key area that business is crying out for across
Hampshire. We need the fibre-optic roll-out programme to be accelerated and widened. That would be a huge helping hand for many firms in the region looking to move their systems into hosted services and encourage the creation of new technology businesses here that will form the backbone of tomorrow’s economy.”
SIMON Court, head of corporate tax at Chandler’s Ford based law firm Blake Lapthorn, said: “The good news is that George Osborne has already announced measures designed to encourage economic growth, which will be coming in now. These include reducing income tax
on top earners from 50 per cent to 45 per cent, and extending the 10 per cent entrepren-eurs relief to employee share option holders.
“There is also the tenfold increase in the Annual Investment Allowance on capital expenditure to £250,000, which will help bring down the tax on profits.
“The bad news is that the Chancellor seems committed to continue the austerity spending programme so his options to offer any meaningful tax windfalls are severely restricted.
“One possibility is to return the headline rate of capital gains tax to 25 per cent. Another is to bring forward the reduction in corporation tax to 21 per cent to next month instead of 2014. But this is countered by the annual cap of £50,000 on the amount of income tax relief which will be available to owners of start-ups.”
GEOFF Rhodes, managing director at Chandler’s Ford-based chartered accounts HWB, said: “I think it’s time the Chancellor did something to spark our entrepreneurs into life.
“Fresh tax and funding measures to help entrepreneurs with plans for growth and making life easier for ownermanaged businesses are long overdue.
“It’s also time to expand on the alternative avenues of investment to the major banks by
further tax incentives for ‘angel’ investors. In fact, stimulating business investment generally would be a smart move.
“The annual investment allowance was temporarily increased in January and I think we’d like to see that extended further in this budget so the momentum is continued.
“Developing schemes to help the nation’s young people and to retain the skills base we have in the UK should be a key priority.
“I’d like to see an expansion of Government assistance to firms with apprenticeship schemes to
increase the opportunities open to young people.
“Finally, further tax reliefs to encourage employee share ownership will not only be motivational for staff but may also help business owners with succession planning.”
SIMON Davies, director of youth employment at the UK Sailing Association in Cowes, said: “As a youth education and maritime training charity we know well the issues young eople face in
today’s society, particularly high unemployment rates.
“There are limited pathways towards jobs, let alone careers.
“And we would like to see the Chancellor do something to help improve young people’s life chances.
“At our youth conference, which was attended by our patron, HRH Princess Royal, we heard how the education system focused on academic results and not the next steps into employment, disregarding apprentices, entrepreneurial spirit and vocational courses.
“It’s time the Government did something to help potential employers bridge the gap between education and employment.
“It’s been suggested that Jobcentre Plus start to provide advice and training opportunities
rather than just expect people to sign on.
“How will the Government invest in its young people this week? It will be interesting to find out.”