Budget: Airport capacity must be confronted in South East

George Osborne George Osborne says lack of airport capacity needs to be confronted in the South East

There's always a lot of speculation in the run up to a Budget but what's been different about this one is the kind of mega-phone diplomacy that the Liberal Democrats have chosen to take part in.

They were clearly keen to differentiate between themselves and the Conservatives, and also to try and hold the government to account and demonstrate that they're on the side of fairness.

The one thing the coalition parties have not argued about is the need to keep cutting the deficit at the pace they have set.

There will still be many, many billions of spending cuts this year and against them, most of the tax changes announced today will pale into insignificance.

Airport capacity

So after all the speculation about mansion or tycoon taxes or the scrapping of the 50p tax rate, what did we actually get when the Chancellor took to his feet at 12:30 in the Commons?

Start Quote

Plans for Estuary Airport at the Hoo Peninsula

We must confront the lack of airport capacity in the South East of England - we cannot cut ourselves off from the fastest growing cities in the world”

End Quote George Osborne (Cons) Chancellor of Exchequer

First the positive news for the South East.

The Chancellor announced measures to drive growth and rebalance the economy including an extra £46 million for the South East Local Enterprise Partnerships to unblock local projects.

He also confirmed £56 million of support for the long-awaited Bexhill to Hastings link road.

That's been welcomed by the Hastings and Rye MP, Amber Rudd.

Another potentially major infrastructure project was also mentioned - the need to create more airport capacity in the South East.

Just last week I interviewed Sir Richard Branson who is calling for a third runway at Heathrow, which has been ruled out by the three main parties.

George Osborne addressed that today and said the government "must confront the lack of airport capacity in the South East of England - we cannot cut ourselves off from the fastest growing cities in the world".

It's the strongest hint yet the government will take action to increase capacity, but to find out how we will have to wait for the Transport Secretary Justine Greening's review which will set out government thinking later this summer.

Tax allowances

Onto the tax changes we heard so much about before the Budget...

As predicted, George Osborne said that from next year the higher rate of tax would fall from 50p to 45p.

On child benefit he said that he wanted it to be fair - and not involve means testing.

Suitcase and fiance papers George Osborne announced that personal tax allowances will rise by £1,100 from April 2013 to £9,205

He said the government wants to avoid a "cliff edge" where those on the higher tax rate were to lose all of their child benefits.

Now, the benefit will only be withdrawn when someone in a household earns more than £50,000.

It will also be gradual so only those earning more than £60,000 will lose all their child benefit.

Both of those measures will no doubt affect more people in the South East than elsewhere, where salaries are generally higher.

At the other end of the scale Mr Osborne announced that the personal tax allowance will rise by £1,100 from April 2013 to £9,205, making 24 million people £220 a year better off.

Tax breakdowns

But don't worry if you want to know where all that tax you're paying actually goes - Mr Osborne said that a personal tax statement to be sent to 20 million tax payers from 2014.

You'll be given a breakdown of exactly just how your taxes are being spent.

George Osborne There was some consolation for businesses as Mr Osborne froze vehicle excise duty for hauliers

He also said the income tax allowance for pensioners will be frozen in real terms.

It's estimated the simplification of the tax system for pensioners will hit OAPs and could raise a great deal of revenue for the government.

As for the usual targets, the price of a pint will increase by more than 5p and the duty on all tobacco products will rise at 6pm tonight by 5% above inflation - that's 37p on a packet of cigarettes.

And on fuel duty - the one so many motorists were hoping to see a cut in - there was little relief.

George Osborne said the fair fuel stabiliser will mean that above inflation rises in fuel duty will only return if price of oil falls below $45 a barrel.

Business help

Some small consolation for businesses...

Mr Osborne froze vehicle excise duty for hauliers.

The Chancellor announced a reform of the tax system for small firms and a review of VAT.

He also announced the government would fund ultra fast broadband and wi-fi in 10 of the UK's largest cities.

But the South East didn't miss out as he said the MP for Brighton Kemptown (Simon Kirby) had asked him to help small cities .

And he said, with that in mind, he was announcing £50 million will be available for smaller cities too.

Louise Stewart Article written by Louise Stewart Louise Stewart Political editor, South East

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  • rate this

    Comment number 5.

    so much for the greenest government, driving a link road through coombe valley country park, a road that will help no one in the area except a small band of investors. Increasing pollution and destroying the natural environment well done lib dems for supporting this tory madness...

  • rate this

    Comment number 4.

    And to continue..... Many pensioners were ripped of by Barmy, Brown and Blair on Northern Rock, and now Clegg, Cameron & Osbourne have been misled by the Treasury and confiscated 78% of dues on Equitable Life..............where is the level playing field?
    I say, move ALL government departments lock-stock-barrel to NE and NW and pay them the local rate.

  • rate this

    Comment number 3.

    Overall a good if uninspiring budget. I understand that there is a change (in the fine detail) concerning the gradual clawback of the Age Related Allowance - ok, maybe?
    But remember, we have saved and planned for our retirements based on all governments sales pitches on pensions over the years, so we deserve ARA

  • rate this

    Comment number 2.

    For some time now, commentators have been accusing the elderly of controlling too much of the Nations' personal wealth to the disadvantage of the young. Those same commentators are now bewailing the gentle measures being taken by the Coalition to remedy that situation by removing Labour's bribes from pensioners. What George's measures do is to level the playing field. BTW. I am retired.

  • rate this

    Comment number 1.

    What is it about this Government that makes them want to punnish pensioners? First there was CPI from RPI and now this tax allowance reduction. Many pensioners do not have the opportunity to get paid employment so the extra allowance gives some relief to this disadvantage. Tory pensioners should spoil their ballot paper at the next election.



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