Budget

BUDGETS are tough moments for any government. They leave difficult decisions to be justified and gift the opposition the opportunity to attack whilst maintaining the luxury of not having to set out any detailed alternative.

So it is with this budget, Labour's charge being that in reducing the 50% top tax rate the coalition is supporting the rich at the expense of the poor. I disagree.

A 50% top rate of income tax is far higher than for most of our competitors. It is a deterrent to entrepreneurship and the growth that creates jobs. And the independent Office for Budget Responsibility states that since its introduction the 50% rate has not even raised significant additional revenues.

It has, though, served to discourage further wealth and job creation both from within the UK and from those who come from outside to invest and develop businesses.

But just in case you are still feeling that the rich got off lightly, the Chancellor announced that changes to various tax reliefs will ensure that the better off pay their share. These changes will actually raise five times as much as the receipts that the OBR suggests might be lost through the reductions in the top tax rate.

There were a number of other very important tax changes in the budget, not least the raising of the lower tax threshold meaning that around two million of the lowest paid workers are to be taken out of tax altogether with 73,000 of these living in the South West.

For these hardworking people and their families this budget has delivered a great deal. It has been a budget that has substantially lifted the dead hand of one of the highest top tax rates in the world whilst taking ever more people out of tax altogether.