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How the budget will hit the South of England

Peter Henley | 16:07 UK time, Wednesday, 23 March 2011

The Chancellor's speech is just the start. When the curtain falls on the great unveiling .. "and I commend this budget to the house" .. we press hounds all dash backstage to swoop like gannets on huge brown paper envelopes containing the budget book.

And in our packages today, a surprise - two books! The Red Book we expected but here too was a Green Book entitled The Plan For Growth.

And there's some interesting stuff there for the South. Some of it already announced, it has to be said, but now shown in the full context of George Osborne's tax and spending decisions.

The South-East of England is traditionally an area of high growth - we have more new start-ups and private sector jobs than any other part of the country - so the measures in a "budget for growth" are going to have a bigger impact. The allowances for entrepreneurs and investment as well as ongoing cuts in corporation tax have been welcomed by business representatives.

£20 million for the Space Centre at Harwell, for example . And two previously announced capital projects - the £4.5bn Intercity Express Programme will see the building of a combination of around 100 electric trains and bi-mode intercity trains, which will run to Great Western Main Line stations including Oxford and Reading.

There's also £900m of rail electrification projects on lines between London and Didcot, Newbury and Oxford. This will be completed by 2018.

Welcoming the Budget for the Conservatives, Devizes MP Claire Perry MP said:

"Last year's Emergency Budget brought Britain back from the brink of bankruptcy. The Government is right to stick to the plan to get Britain living within her means and this year's Budget sets out plans to back enterprise and get Britain making things again. By cutting fuel duty immediately and cutting income tax for millions, the Chancellor has done what he can to help families now. This Budget has put fuel into the tank of our economy."

They estimate that by increasing the personal allowance by £630 in April 2012 to £8,105. 3.56 million South East taxpayers will gain by £48 a year in 2012-13, and 32,000 will be taken out of tax altogether.

Working on the regional figures they estimate 3,300 unemployed people in the South East could benefit from the roll-out of the New Enterprise Allowance to start their own business.

From cuts in corporation tax to incentives for philanthropic giving to charity there are measures here that are aimed to boost growth.

But Labour say this is smoke and mirrors.

They say they wouldn't be increasing petrol prices, given the high price at the pumps and point out that in their time in office the proportion of tax fell from 75% in 97 to 65% in 2010.

Nor would they be thinking about cutting the 50p top rate this year.

They believe there is a "quite substantial risk" that oil companies will pass on extra tax at the pumps.

The change to CPI wipes out the freeze in personal allowances. What he gives with one hand he takes with another, and continues to take - up to £1bn p/a by end of parliament and rising.

Southampton MP and shadow Skills and Innovation Secretary John Denham said

"On petrol prices the government should have gone further in this Budget. Across the South East the average cost of a litre of unleaded is now 133.6p - up from 10.9p in December before the Tory VAT rise.

"George Osborne should have listened to Labour and reversed the VAT rise on petrol, which is adding £1.35 to the cost of filling up a 50 litre tank.

For the Liberal Democrats Dorset MP Annette Brooke said

"This Budget not only continues to deliver on our promise of sustainable growth for the UK, but also delivers on the Liberal Democrat commitment to fairness."

"Under the new Budget, 23 million people will have a tax cut of £200 from April this year. The personal income tax allowance rises will lift 1.1 million people out of income tax altogether. I am proud to see this Lib Dem policy becoming a reality under the Coalition Government."

But one area where the South of England may lose out is the new Enterprise Zones.

These offer special tax reliefs, extra revenue for local authorities and support with things like guaranteed super-fast broadband.

All the ten places offered this boost are currently in the North and Midlands, except for Bristol, and today we heard that Boris Johnson is being asked to find one in London.

The new Enterprise partnerships in the South will also be able to bid for a second wave of ten more Enterprise Zones.

The Local Government Association are expressing some fears that these might suck jobs out of neighbouring areas. But what about sucking work from South to North? Or maybe that's a good thing?

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