Mike Crockart and Graham Birse tell the Chancellor what he should be doing in this week’s Budget
• Graham Birse
This Chancellor has very little room for manoeuvre. His predecessors were able to hand out sweeteners, particularly in pre-election budgets. George Osbourne, however, is between a rock and a hard place.
He can spend public money on stimulating the economy, increasing the cost of UK borrowing to eye-watering levels and risking a downgrade in our AAA credit rating. Or he can maintain a determined course, controlling public spending in the expectation that the economy will gradually recover.
But will it? The view of Chamber of Commerce members in Edinburgh is that recovery is underway, but it’s fragile and needs careful nourishment. In a period of austerity, we must create the conditions in which businesses can grow and recruit. The alternative would be a return to the “Boys from the Blackstuff” years of the 1980s, when entire communities were blighted by joblessness.
Our prescription is straightforward. Tackle the issues that are inhibiting business growth – freeze business rates, provide 100 per cent relief on capital allowance for business investment, double the value of the Youth Contract from £1 billion to £2bn, encourage entrepreneurship and reduce the regulation and red tape which stifles ambition.
Lots of initiatives are under way in Edinburgh to encourage business start ups and growth. Tackling the inhibitors to business growth will enable many more to accelerate recruitment and recovery.
• Graham Birse is director of policy and communications for Edinburgh Chamber of Commerce.#
• Mike Crockart
On April 6, all but the richest taxpayers will see a rise in their take-home pay. This is because the Coalition is raising the personal allowance of income tax – the amount of money you can earn before you begin to be taxed.
This was a key Liberal Democrat manifesto pledge which the Liberal Democrats fought hard for in the Coalition negotiations and a policy which will make a real difference to working families and young people around the country.
Every worker will be given a tax cut of £126 in April; that’s £126 extra in your pay packets over the year. This is on top of the £200 tax cut which happened last year. From next month, over a million working people will no longer pay income tax because of the Coalition’s tax policy. But we need to go further and faster.
This week, I want to see another Budget which will benefit the millions of hard working people across Scotland and the rest of the UK; not one which works for a few millionaires. That means George Osborne putting forward a plan which focuses on helping people on low and middle incomes, helping young people get skills and jobs, helping disadvantaged young people in schools and creating jobs through investment. We have been quite clear that those who can afford it should shoulder the greatest burden. We need a tax system which is fair and so that it rewards work and ensures that the richest pay their share. There’s a lot of speculation about the Chancellor’s plans: will there be a cut to the 50p tax rate? Will a ‘mansion tax’ be introduced?
The Liberal Democrats’ priority is giving tax cuts to the majority of people in the country, not just the highest earners. At present there are far too many people using complex allowances and reliefs to weave their way through the tax system and who end up paying an amount of tax that is just not fair when compared to the vast majority of hard-working people.
It’s important that everybody is seen to pay their fair share, so I will not support the removal of the 50p rate without a major change in the way the wealthiest in our society are taxed to ensure that they pay their way. The Mansion Tax is just one possible option to make certain that this happens. You can’t move a house to Belize, in the way that some of the top one per cent of earners hide their income, and by taxing the value of a property at one per cent over and above a £2 million limit you would make sure that the very wealthy have to pay up, including those extremely wealthy individuals who do not pay income tax here at all.
The economic circumstances shouldn’t make us shy away from tax reform; in fact it makes it more important to help struggling families and make the tax system fairer. Our tax plans are a straight swap – cutting income tax for the vast majority of people by clamping down on tax avoidance. We need to prioritise these tax cuts for hard-working people by raising the personal allowance again and ahead of schedule. That would give you £60 a month extra in your wages, that’s £60 you can spend on the weekly shop, or put towards the quarterly gas bill.
You can let me know what you would spend the £60 each month on by contacting me on Twitter @crockartmp #60pounds
• Mike Crockart is the Liberal Democrat MP for Edinburgh West