The reaction to the 2011 budget
Fuel
AA - "We and millions of AA members, two-thirds of whom have cut back because of record fuel prices, applaud the Chancellor's decision to listen to the AA campaign to cut fuel duty rather than hike it by 5p a litre. A 2.50-a-tank hike would have been the last straw for poorer drivers who spend a quarter of their household income on motoring," says Edmund King, the AA's President.
British Retail Consortium Director General Stephen Robertson said: "This is more help than expected and a very welcome relief from some of the fuel cost pressure that's hitting businesses as well as households. On its own it won't make a huge difference to household budgets but should give a boost to struggling consumer confidence."
Inheritance Tax
Prudential's Technical Manager, Gerry Brown said: “On the Pensions & IHT announcement: "A clever move which won't cost much in revenue terms but which shows that tax collectors have a heart!"
First-time buyers
Simon Rubinsohn, RICS chief economist, said: "Opening up the housing market to first time buyers will be essential to help support economic growth. This is a key area as the lack of mortgage lending has significantly reduced the number of homes being bought and sold which in turn has led to low housing housebuilding levels.”
Chris Smith, Group Direct Mortgage Manager with the Yorkshire Building Society said: "As a leading mortgage provider we welcome the Government's commitment to first time buyers through the FirstBuy scheme and the extension of the SMI project. Any moves which help first time buyers purchase their first home allowing them to get onto the property ladder will be a boost to the housing market as a whole."
Phil Cliff, Mortgage Director at Santander, said: "It's good news for first time buyers that the Government has decided to help the UK housing market and offer those struggling to get a deposit the chance to take up a five-year interest free loan for new build properties.
“However we feel there is also a need for new housing models to be developed across the UK; such as the development of shared ownership partnerships between mainstream lenders and affordable housing providers.”
Gift Aid
John Low, Chief Executive of the Charities Aid Foundation said: "The Chancellor has today delivered for charities and those who want to support them.
"The commitment to bring Gift Aid into the 21st Century will revolutionise this important tax relief and go a long way towards reducing the £750million that goes unclaimed each year. “
Business
John Walker, National Chairman, Federation of Small Businesses, said: "The Chancellor has said that this Budget would be a ‘Budget for Growth' and in part that is what we have - however, there are vital components missing for small firms to create jobs.”
John Cridland, CBI Director-General, said: "This Budget will help businesses grow and create jobs. The Chancellor has made clear the UK is open for business.
"The extra 1p cut in corporation tax will help firms increase investment. Meanwhile, significant changes to entrepreneurs' taxation will rightly focus much-needed support on businesses with growth potential.”
Families
Citizens Advice Bureau Chief Executive, Gillian Guy said: "There is some comfort here for lower paid workers and their families, who are struggling financially with pay freezes, rising prices and cuts to public services.
"But it is clear that for many working families any gains from this change are likely to be outweighed by the 1% rise in National Insurance, cuts to child tax credit and the retention of the higher VAT rate.”
Family Action Chief Executive Helen Dent said: "George Osborne's clearly not a family man. There was nothing in the Chancellor's Budget address to Parliament for disadvantaged and vulnerable families. We need a fair family stabilizer not just a fair fuel stabiliser.”
Planning
BPF chief executive Liz Peace said: "We welcome measures to streamline the planning system and related consents regimes through the removal of bureaucracy, particularly as local authority resources are stretched thinly at the moment. We welcome the 12 month guarantee, however we are concerned that this additional pressure could result in unnecessary rejections."
Merging NI and Income Tax
Vincent Oratore, President of the Chartered Institute Of Taxation (CIOT) said: "We congratulate the Chancellor on finally grasping a nettle that successive administrations have shied away from. As the Office of Tax Simplification report has shown, there are real admin savings, especially for employers, in harmonising the way the two taxes are run. This is a complex issue and it is clearly right to study it carefully - but we must make progress on this important issue.”
Bank Levy and Corporation Tax
Angela Knight from the British Bankers Association said: "While corporation tax is paid on profits, the bank levy represents an additional fixed cost for larger banks operating in the UK. It also controversially can include the business that banks are doing outside the UK. Without satisfactory double taxation arrangements in place, this is putting banks operating in the UK at a long term disadvantage.”
Pensions
"This can only be a positive thing for consumers, as it will simplify the current system, reducing confusion and misunderstanding for our customers," said Simon Butler, Policy and Proposition Manager at Friends Provident.
Dr Ros Altmann, Director-general of Saga said: The best news announced by the Chancellor for pensioners is that the over 65's special personal tax allowance will rise in line with rpi for the rest of this Parliament.
Overall
Kevin Mountford, head of banking at moneysupermarket.com said:
"Reductions in fuel duty, help for first time buyers and those struggling with mortgage repayments announced in today's budget will be welcomed by many. However, changes to benefits and taxation announced in the emergency budget were unaffected by this announcement and will still come into force in April, so consumers need to take control of their finances and make sure any changes don't hit their pocket too heavily.”
National Institute of Economic and Social Research (NIESR) analysis of the budget:
Despite the downward revisions, we think the Office for Budget Responsibility's (OBR) forecast for economic growth (1.7 per cent in 2011 and 2.5 per cent in 2012) remains too optimistic.
We expect a more subdued recovery (GDP growth of 1.5 per cent in 2011 and 1.8 per cent in 2012) due in large part weak very consumer spending growth. Such poor consumer spending growth is expected because of declining real incomes this year and a weak housing market both this year and next.
The Adam Smith Institute has released the following analysis of Osborne's Budget:
Osborne's budget won't kick-start economic growth. Business and income taxes are too high for timid modifications to deliver the growth we need.
More than two thirds of the price of a litre of petrol is tax. Cutting a penny from fuel duty won't impact on businesses or ordinary people.
While Britain's other taxes are so high, cutting corporation tax alone will do little to attract foreign businesses.
TUC and Labour view
TUC General Secretary Brendan Barber said: 'Today has been a no-change budget. The Chancellor has been forced to reveal the evidence that his policies aren't working but has not had the courage to change them.
“Today's measures do nothing to end the basic error of imposing deep, rapid and unfair spending cuts on an economy where unemployment is rising and growth faltering.”
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