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You are in: Somerset > Behind the headlines > Pre-budget report: Your reaction

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Pre-budget report: Your reaction

On the Big Breakfast we spoke to families and businessmen for their reaction to the pre-budget report and whether they felt any of these changes would make a difference to their lives.

On the programme, presenter, Adam Thomas spoke to two families, one from Taunton and the other from Bridgwater as well as a businessman from Highbridge.

Both families welcomed the increases in child benefit and pensions, but felt this would be outweighed by the increased duty in fuel and utility bills.

There was also scepticism regarding the cut on VAT, which will go from 17.5 per cent down to 15 per cent from 1 December 2008 until 31st December 2009.

Short term measure

Ian and Sarah Macfarlane live on the Priorswood Estate with their two children.

Ian is a vicar and Sarah works as a receptionist at the Citizens Advice Bureau in Taunton.

Sarah, who is in charge of the weekly household budget didn't feel the drop in VAT would make a huge difference.

"I think it's a short-term measure really. For us £2.50 in a £100 of spending is not going to make a lot of difference, it's not on the basic budget stuff like food, which is currently our biggest outgoing."

There was also concern about encouraging consumers to spend more to support the shrinking economy.

"It shows a level of irresponsibility which we are trying to discourage most people from following in their personal lives and their debt situation.

"We're trying to advise people out of debt crises and here we are seeing the government doing that very same thing - turning to its own loan shark," said Sarah.

The state pension will rise in line with the highest rate of inflation this year, producing a rise of £4.55 a week for a single person, something that Ian felt would help older people living on the estate.

"I'm sure it would help, but looking at some of the elderly people who live on Priorswood, it's the cost of everyday living that (they struggle with).

"The impacts of such benefits don't really go very far, when it's spread over a year for them and there are plenty of people who are old age pensioners who are suffering financially."

'Bit of a farce'

James, which isn't his real name, lives in Bridgwater and has got three children.

He told BBC Somerset that making ends meet was ''a struggle'' and felt Monday's announcements were "a bit of a farce and spin".

"It probably makes me £6.40 a month better off (from child benefit), which doesn't really touch the sides.

"Petrol is going to go up by two pence, and the rising costs of utility bills, even though oil costs have gone down, it's not going to make the slightest bit of difference."

Manuflex Limited is a small specialist engineering business based in Highbridge and earlier in the year, managing director Ray Stewart said he had to make 19 staff redundant because of the economic downturn.

"There's a lot of bluster in this and not enough to encourage us to do what we need to do, which is spend cautiously, but a little more than we're doing presently."

'Big question'

The cut in VAT wasn't considered as the right way of encouraging people to spend more than they normally would.

"The big question is will this encourage people to buy something more than they would have done ordinarily and I'm not sure it will.

"Given that some stores in Taunton were offering 20 per cent off last week, I'm not sure 2.5 per cent off will make a difference," said Rob.

The VAT reduction wasn't enough to reduce his prices to reflect the change either.

"Margins are extremely tight for everybody and I'm not sure that that particular measure is going to be the one that makes the difference."

last updated: 25/11/2008 at 14:12
created: 25/11/2008

You are in: Somerset > Behind the headlines > Pre-budget report: Your reaction

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