The economy may well be showing signs of recovery, but today’s budget reminds us that there is a long way to go. At its core, it attempted to address the need to ensure growth continues and the necessity to create a balanced recovery – one which is not fuelled principally by consumer debt and a buoyant housing market in London and the south east, but balanced with growing exports, business investment and manufacturing.
There was some good news for many groups of shoppers however.
The rise in the personal tax allowance to £10,500 and the increase in the threshold for the higher tax rate will benefit shoppers across the board and will be particularly welcome for lower income families who have seen their disposable income hit hardest over recent years.
Perhaps the biggest beneficiaries of the budget are savers and pensioners. More generous ISAs will give (typically older and better off) families greater and more flexible access to tax-free savings, while the introduction of the new Pensioner Bond will provide competitive returns to savers aged over 65 years old.
Other news that fuel duty will remain unchanged and that alcohol duty will remain unchanged (spirits and cider) or cut (beer down by 1p) will be welcomed by many shoppers. Bingo sees duty half from 20% to 10%, providing much needed relief to the embattled sector.
However, with public spending cutbacks still central to the Chancellor’s plans, many of those employed in the public sector face challenges and uncertainty surrounding their jobs and future pay increases. Looking at the broader picture, despite better economic news and some tax relief for many families, today’s news has to be viewed in perspective. As the Leader of the Opposition Mr Miliband was keen to point out the rising cost of living has seen the average family become £1,600 a year worse off since the government came to power. Many families still continue to struggle and will judge the economy, not on what they hear today, but on how much money they have in their purse.