Budget 2013: George Osborne to bring tax relief for lower income workers
I reflected last week on Mark Shucksmith’s predicition that one of the key challenges facing rural dwellers over the next few years would be “in work” poverty. In my one chosen, more detailed story, from this year’s budget, I ask you to think about how much of a palliative to Mark’s concern the measure set out below in relation to tax relief for low income workers will be. It tells us:
George Osborne is to cast himself as the champion of Britain’s hard workers when he unveils a series of measures designed to ease the pressure on low and middle-income earners and show the country faces a “painstaking” journey to recovery.
The chancellor is expected to announce that moves towards a tax-free allowance of £10,000 will be brought forward a year to 2014. A planned rise in fuel duty, due to take place in September, may be delayed or even scrapped altogether.
As the Treasury braces itself for a grim outlook, amid signs that the Office for Budget Responsibility will again downgrade growth forecasts, the chancellor will move to show that he is committed to stimulating the economy by announcing new capital spending projects.
Osborne and his Liberal Democrat deputy, Danny Alexander, told the cabinet on Tuesday that they will direct an extra £2.5bn over the next two years into capital projects after imposing a new 1% cut on some Whitehall departments.
Amid criticism that the Tories blundered in the Eastleigh byelection, by failing to focus on the challenge of the rising cost of living, the chancellor aims to turn the focus in his budget statement to support for hard pressed families.
The measures on the personal allowance and fuel duties are carefully balanced to satisfy both sides of the coalition. This follows the disastrous handling of last year’s budget, which Osborne blamed on the Lib Dems after they allegedly leaked detail of his key measure, to cut the top rate of tax from 50p to 45p.
The Lib Dems made raising the personal tax allowance to £10,000 the first pledge in their general election manifesto. A source said: “Reaching the £10,000 figure will represent a major coup for the Lib Dems.”