Mention the 2012 Budget to most people, and it’s unlikely to conjure excitement, but at the very least you might expect it to hold a certain morbid fascination. After all, when George Osborne and his colleagues squeeze the country’s spending and tinker with taxation, it’s we who are affected. But judging by the reactions of Brighton residents, it seems that a climate of despondency fostered by a prevailing economic insecurity means most people are not even interested in reading it.
Although many were unaware of the finer (some might say confusing) details of the document, there was a general perception that it is weighted unfairly, penalising the middle-classes and the vulnerable without even delivering the support to businesses that had been promised.
Frank Jay, 46, owner of the Chilli Shop in Brighton Marina said that he could understand the government’s austere approach, but was disappointed by recent hikes in VAT. He claimed it means that he must raise the price of his merchandise past the point that people are prepared to pay, decreasing his profit margins.
Coach driver David Grimwood, 64, labelled the Budget as “appalling” and blamed the rise in fuel duty for stagnation in the coach industry. George Osborne refused to freeze the price of petrol despite public outcry over escalating costs, and now it is set to increase to 145p a litre in August. Mr Grimwood said that the price hike did not take into account how it might affect transport businesses that contribute towards the economy and lower congestion on the roads. “In our industry, we work to take cars off the road, but now we are being penalised for it” he said.
Caroline Lucas, leader of the Green Party and MP for Brighton Pavilion, attacked the Budget for what she alleged to be a regressive support of fossil fuels. After lobbying from the oil and gas industry, Osborne unveiled that tax breaks on small oil and gas fields were to be doubled, saving companies like Premier Oil millions. Lucas said that the Chancellor’s lack of attention to clean renewable energy sources showed that “This true blue budget is the nail in the coffin for this Government’s ‘greenest ever’ pledge.”
“This true blue budget is the nail in the coffin for this Government’s ‘greenest ever’ pledge.”
Caroline Lucas, Green MP for Brighton Pavillion.
The revisions to age-related allowances – dubbed the ‘granny tax’ – have also angered many. Under the new rules, the tax-free allowance for the 65-74 year group will be capped at £10,500, whilst new retirees will be forced to accept the main personal allowance of £9,105 in 2013 without any age-specific dispensations.
Osborne denied that the move would penalise the elderly, saying that the move was intended to simplify the current system. “We were rapidly increasing the tax allowances and they were going to overtake the age-related allowances so it allowed me to subsume them into one and simplify the system,” he said.
Others remained unconvinced, with those approaching the previous age of retirement at 65 voicing disappointment that they would not receive the financial assistance they expected after a lifetime of hard work.
Mrs Robins, a pensioner, described the reduction of the 50p tax rate to 45p coupled with the scrapping of tax allowances as ‘cruel’, saying that ‘the wealthy will be laughing’ while the elderly struggle to make ends meet. “I haven’t had my heating on, and only use it for a few months of the year because of the high heating bills”, she continued. “We can’t afford it.”
Caroline Lucas seemed to reflect the mood of the public, calling the dropping of the 50p tax rate “a slap in the face for the millions of working people across the country fighting a losing battle against falling wages, job insecurity, rising living costs and severe public spending cuts.”
But Simon Kirby, Conservative MP for Brighton Kemptown and Peacehaven defended the budget, stating that the largest-ever increase in personal tax allowance to £9,205 and the emendations to child benefit changes would serve as “a helpful boost to millions of low income families”.
However, despite Simon Kirby’s optimism, a mix of suspicion and apathy is evident in the public’s response to the 2012 Budget and the economic policies of the Coalition in general. It is clear that the government has a fight on its hands in the coming months to prove its commitment to protecting ordinary taxpayers and ensuring the UK’s future stability.