Bad news Budget: £110 extra in taxes on families across North East Cambridgeshire
 Malcolm Moss gives his analysis of Government’s tax and spending plans

Malcolm Moss, MP for North East Cambridgeshire, this week delivered his verdict on the Budget which sets out the Government’s plans for taxes and public spending. Malcolm Moss highlighted a series of areas where local residents across North East Cambridgeshire will lose out:

Clobbering responsible drinkers: Instead of targeting irresponsible binge drinkers, responsible drinkers are being hit with inflation-busting increases in alcohol duties, raising £1.5 billion in extra taxes over the next three years.

Little help for pensioners: The Winter Fuel Allowance has been increased for the first time in five years. But the increase is only a one-off for this year. Meanwhile, the burden of council tax bills is set to rise by another £1.2 billion this year, with council tax rises coming on top of hikes in previous years.

Harder to get onto the housing ladder: This Budget fails to address the growing burden of stamp duty on first-time buyers - half of whom now pay stamp duty. More family homes will be paying 3 and 4 per cent stamp duty, as the thresholds are unchanged.

Higher income tax and National Insurance for many: Tax changes on National Insurance and income tax announced in the last Budget are still to come into effect. Independent experts have calculated that 3.5 million families will be worse off as a result.

Drivers face new stealth taxes: The Government is to fund new technology to impose controversial ‘spy-in-the-sky’ national road pricing taxes. Meanwhile, family cars face extra taxes of £735 million a year, but the tax cuts on small cars are only worth £15 million a year.

Malcolm Moss MP said:

“The cost of living is rising fast, but Gordon Brown’s Government has added to it with a barrage of new stealth taxes. This is a bad news Budget that adds £110 a year to the tax bill for families across North East Cambridgeshire.

“Any extra taxes on alcohol or cars should be offset by tax cuts elsewhere, but Labour has just used them as an excuse to raise more money for Gordon Brown’s coffers. Taxes and borrowing are up because the Government failed to use the good years to prepare for the bad years.”

Notes to Editors

HIGHER TAXES

As a result of the Budget, the tax take will be £2.8 billion a year higher by 2010, equivalent to £110 for every family.

STEALTH TAXES ON ALCOHOL

The Budget has announced a six per cent increase above the rate of inflation in all alcohol duty rates to come into effect on 17 March 2008.  Duty rates will then rise by two per cent above the rate of inflation in future years. This will raise an additional £1.2 billion in taxes over the next three years. Conservatives have called for alcohol taxes to target problem drinks – such as alcopops, strong beer/cider, with offsetting tax reductions on lower alcohol drinks.

GROWING COUNCIL TAX BURDEN ON PENSIONERS

The Winter Fuel Allowance has been frozen for the last five years, at a time when the average fuel bill has risen by 60 per cent in the last 4 years – with the average bill up from £572 in 2003 to £924 now. Although the Allowance rises slightly, this is only for one year – in the same way that the £200 payment for pensioners’ council tax was introduced for only one year ahead of the 2005 general election. Council tax receipts are due to rise by 5.1% - equivalent to another £1.2 billion a year.

HARDER TO GET ONTO THE HOUSING LADDER

The Budget fails to address the growing burden of stamp duty on first-time buyers - half of whom now pay stamp duty. A typical first-time buyer is unable to afford an average house in 96 per cent of all towns. By contrast, under Conservative plans to raise the stamp duty threshold to £250,000 for first-time buyers, 93 per cent of them would pay no stamp duty.

None of the thresholds for the 3 per cent or 4 per cent stamp duty bands (£250,000 and £500,000 respectively) have been increased since their introduction, despite rising house prices. As a result, more and more homes are being dragged into the higher stamp duty brackets every year.

STEALTH TAXES ON FAMILY CARS

The Budget reaffirms the Government plans for a national road pricing tax, despite 1.8 million people signing a Downing Street petition against the new charges.

Vehicle Excise Duty tax rises on larger, family cars is fifty times larger than the tax cut on the smallest clean cars. The tax cut for clean cars is £15 million, while the tax rise for polluting cars will rake in £735 million a year by 2010.

HIGHER INCOME TAXES AND NATIONAL INSURANCE

Tax changes from the 2007 Budget will also come into effect. From April 2008, the 10 pence income tax starting rate will be removed for earned income and National Insurance Contributions will increase as the upper limit for paying the 11 per cent rate will rise by £75 per week to £745 or £38,740 per year.  Independent experts at the Institute for Fiscal Studies have calculated that 3.5 million families will be worse off as a result of the changes.

From April 2009, National Insurance Contributions will increase again as the upper limit for paying the 11 per cent rate will rise to the same level as the top rate income tax threshold. The overall impact of income tax/NIC changes will cost working families over £300 million a year.