Budget - for millions or for millionaires?

Chancellor on TV screens

Never forget that the chancellor is from a family of gamblers, one of his friends told me.

On Wednesday George Osborne gambled that he could cut the tax rate for the richest because the official figures suggest it raises very little. He's raising other taxes on the wealthy and he's spending much more giving a tax break for those on lower and middle incomes.

Ed Miliband - also something of a spinner of the political roulette wheel, as his brother discovered - is gambling that this decision alone will destroy the coalition's claim that "we are all in this together".

Most people in the days after the Budget focus on how the chancellor's decisions affect them.

Millions of taxpayers will welcome the little more they can earn tax free. But millions of pensioners will see their tax allowance frozen.

Three quarters of a million higher tax rate payers will be breathing a sigh of relief that their child benefit is not, after all, being cut.

BUT millions hoping that their tax credits won't be cut or that fuel duty will be held down will be disappointed.

Nick Robinson's Budget explainer

Smokers, company car drivers, drinkers of sports drinks and eaters of hot chicken on a spit will all lose a little.

Rich buyers of £2m houses or exploiters of tax reliefs will hurt but millionaires who aren't moving house or using those reliefs will get a very big tax cut indeed. Overall the Treasury's numbers only add up on the assumption that the money lost by cutting the top rate is offset by the gain of people moving themselves or their tax back into the UK.

The old political rules state that no-one can win an election promising to increase tax.

Will new rules be written that prove that no-one can win one by giving a tax break to the rich in an era of austerity.

Nick Robinson Article written by Nick Robinson Nick Robinson Political editor

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  • rate this

    Comment number 261.

    comment 221- the CEO won't pay higher salaries to his staff because the tax credit system actually subsidises business- he can pay lower wages (so he makes more money) while his employees claim state help, funded by indirect taxation (as per my previous post) of which he pays a much lower percentage of his income - it's a win-win as far as he's concerned.

  • rate this

    Comment number 260.

    'Good for business' = bad for ordinary people. Creating 'a thriving environment for business' by 'competetive taxation and employment laws' means business and rich individuals paying very little while the infrastructure they need is paid for by the masses who are also going to lose whatever little employment protection there still is and who will never get to retire.

  • rate this

    Comment number 259.

    Income tax does not pay for government expenditure - indirect taxation does, therefore the rich pay very little (even discounting their avoidance schemes) and ordinary people pay the most- both in actual pounds and as percentage of income. It's also why they won't cut fuel duty; (millions having no choice but to use a car to get to work) yet are now talking about privatising roads.

  • rate this

    Comment number 258.

    No problom if it works - might reduce the current situation of town centres being no go areas after 9pm on weekends. Puzzled the |Home Secretary fronted up the public announcement - why this was not announced in the budget (after all its a change in the tax/duty levied), perhaps George is struggling with the lashing he is getting from OAP's and cant take anymore beatings

  • rate this

    Comment number 257.

    This is a good budget for business, competitiveness and investment in the UK. It paves the way for growth and the creation of jobs. That had to the be the main priority and the Government delivered. Pensioners will not gain as much as they had hoped but once again they will be better off as a result of this budget. Over time millions will benefit greatly from a renewed support for business.


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