John Whittingdale - Member of Parliament for Maldon

In the week since the Budget, there has been plenty of time to look at the small print. As in all Gordon Brown’s budgets, his speech only tells half the story.  The good news was largely leaked in advance. The bad news was not even contained in the speech at all. As ever, it is not until you are able to look at the detail that the full picture emerges.

Gordon Brown’s announcement of a 2p cut in income tax was intended to wrong foot David Cameron who had to get up within seconds to reply. However, it was a con trick which was exposed as soon as the figures were published. It was only later that it emerged that instead of cutting taxes, the Chancellor had put them up. While the basic rate may be coming down, the 10p starting rate for earned income will be scrapped and the upper limit for National Insurance Contributions will be raised As a result, the tax burden is set to rise to its highest ever level of 40.4 per cent, a rise of over £17 billion. Everyone earning between £5,000 and £18,000 will end up paying more tax and many more will become dependent on tax credits. Yet as the many people who come to see me to complain about tax credit mistakes can testify, half of all tax credit payments are wrong.

There was little good news for business in the Budget either. Again, much was made of the headline 2p cut in Corporation Tax. However, the overall burden of business taxation will rise by £1 billion next year. Smaller companies will be particularly hard with a rise in their rate of corporation tax by 3 per cent and changes to allowances which will further damage smaller firms that can afford to invest less. It is hardly surprising that the British Chambers of Commerce said that its members feel dismayed by the measures taken which will hit their competitiveness and increase their tax burden.

Despite the tax rises, there was little good news for public services. The growth in education spending was halved, breaking Labour’s manifesto pledge to increase the share of national income spent on education. In addition, there was just one mention of the NHS in the entire speech and that was to reannounce what he first said three years ago, the increase in NHS spending this year. Locally, our NHS is struggling with record deficits. The Mid Essex PCT is forecasting a deficit of £20 million this year and Mid Essex Hospitals is in the red to the same amount. Almost 20,000 jobs are set to be lost from the NHS this year and redundancies at our own local hospitals are already being declared. The Budget had nothing to offer, only higher taxes and poorer services.

Last week’s Budget was more notable for what it did not say that what it did. While it contained a number of worthy measures to promote micro-generation, to help our athletes prepare for the Olympics and to support those in further education, it did nothing to address the serious economic problems facing the country.

The tax burden in Britain is already at an all-time high. The increase in tax since Labour took office is equivalent to £9,000 per household yet this Budget adds another £5.5 billion to Britain’s tax bill over the next three years. Three of the most punitive and unfair taxes: stamp duty, inheritance tax and Council Tax are all set to rise still further. Last year, in a pre-election bribe, Gordon Brown gave pensioners £200 to help with Council Tax bills. This year, with the election safely out of the way, that payment has been dropped and pensioners will be left struggling to meet ever rising Council Tax bills unaided. Borrowing too has soared with the total over the next six years forecast to reach £175 billion - £7,000 for every family.
Having previously trumpeted the extra money going into the NHS, this year the Chancellor did not mention it all. Across the country, the NHS is facing a total deficit of nearly £1 billion with hospitals being forced to sack staff and operations cancelled. Locally, both the Chelmsford and Maldon Primary Care Trusts are in deficit with services being cut as a result. Also ignored was the looming Pensions crisis. The removal of dividend tax credits by Gordon Brown in 1997 has cost the pension funds £5 billion every year creating the present crisis. Household saving has almost halved and 85,000 people have lost their retirement savings because their company pension schemes have closed. Yet the Government has done nothing to implement the recommendations of its own Pensions Commission and has rejected the findings of the Ombudsman who concluded that the Government was guilty of maladministration in respect of thousands of pensioners who have lost their savings despite being assured by the Government that their pensions were safe.

Under Gordon Brown, Britain’s position in the world ranking of competitiveness has fallen from 4th to 13th. Productivity has fallen to a fifth of its level in 1997 and the trade deficit has reached a record level of £47 billion. Business investment is at its lowest since records began and international firms are moving their operations overseas. The new global economy offers great opportunities but Britain is struggling to compete. Gordon Brown has saddled us with high taxes, unproductive spending, increased borrowing and underperforming and unreformed public services. All this Budget offers is more of the same.