This morning we posted the Budget hopes of ConservativeHome's expert panel of political figures and commentators in their respective areas of interest or expertise. Did Alistair Darling deliver what they hoped for? Their responses will be posted during the course of the afternoon.
5pm
Jill Kirby, Director of the Centre for Policy Studies, on The Family
This Budget was an insult to our intelligence - who would believe the Chancellor's growth forecasts? But it was also an insult to families.
Darling refused point blank to accept the failure of the tax credit scheme, claiming it was helping families through the recession. So, you might be living through the worst downturn in peacetime, but if your hours are cut as a result then (provided you can face entangling yourself with all the bureaucracy and form-filling whenever your circumstances change) you might get a bit more working tax credit.
And the Chancellor's answer to child poverty? Child tax credit will go up by (wait for it) nearly 40 pence a week from 2010. Wow. Using that old Brown trick, Darling announced that the credit would "increase by £20"- failing to add that he meant £20 A YEAR - so the casual listener might think he meant £20 a week. A cheap trick.
4.30pm
Matthew Sinclair, Research Director at the TaxPayers' Alliance, on Taxes on the Low Paid
Financing the huge debts announced in this budget will require serious cuts in expenditure or imposing a completely unacceptable burden on ordinary families for years to come. The Government's £15 billion of proposed cuts are a very welcome start, but if that's all they can do then we are going to see a massive hike in taxation or a collapse in the public finances.
It is vital that cuts like abolishing the BERR bureaucracy, the RDAs, the Strategic Health Authorities and other quangos in our alphabet soup government are made. At the same time, drains on the public finances like gold plated public sector pensions will need to be reformed.
Paying for the unaffordable increases in spending we've seen in the last ten years, without the revenues of an unsustainable boom, can't be done just by soaking the rich. Despite the pretence that he is helping ordinary people and bashing the rich, the Chancellor is in fact increasing the cost of everything from driving to work to a pint of beer as part of the package of measures since Budget 2008. Those taxes may be sold as "sin taxes" that will make us behave better, but the distributive effect is to impose a punishing burden on the poor.
4.15pm
Harriett Baldwin, PPC for West Worcestershire, on Banking and the Financial Sector
This budget is like watching someone go on a spending spree with your credit card and you can't call the bank to stop it. The pound fell and the gilt market fell. The size of the borrowing requirement is greater than the market's worst fears.
There were some warm words about encouraging new entrants into the banking sector; the words on financial regulation and tax avoidance only said "Watch this space"; and the foreign investors whom we are depending on to finance this borrowing spree may well decide not to watch this car crash government and will go elsewhere, forcing up our borrowing costs and risking another run on the pound.
4pm
Nick Bourne AM, Conservative leader in the Welsh Assembly, on The Economy in Wales
The people of Wales face a double whammy of spending cuts thanks to the mess Gordon Brown, Alistair Darling and Rhodri Morgan have made of the economy. As well as the consequences of measures taken at Westminster, today’s Budget sees millions slashed from the Assembly’s finances at exactly the time we need every penny to safeguard jobs, support businesses, and help families.
The Labour-Plaid Cymru Assembly Government has failed to prepare for this, even though we warned them months ago. Even at this late stage it is not too late for ministers in Cardiff to re-prioritise their Assembly spending plans, shifting the focus onto investment in jobs, services and communities, not expensive gimmicks and freebies.
The rise in fuel duty will hit hauliers and motorists, particularly those living in rural areas, while increased duty on alcohol will make life even harder for pubs and clubs across Wales, adding to the list of those which have already closed.
3.45pm
Dan Lewis, Research Director of the Economic Research Council, on Tackling the Quangocracy
1. Another new quango with a catchy action-sounding name - a £750 million Strategic Investment Fund" to support advanced industrial projects of strategic importance". Does that mean every other government investment to date was unstrategic, unadvanced and of little to no importance?
2. Increased subsidy (euphemistically called an uplift) for offshore wind of £525m. Why pledge additional funds to a technology that can only make a marginal difference at fast increasing cost? Unlike onshore wind, the price per installed megawatt for offshore wind has doubled to £3m in a few short years and the investors are running for the hills. Ideally, when costs go up, governments have to retreat and look for alternatives but here they have drawn the opposite conclusion. All of that of course leaves aside the load-balancing issues of large quantities of wind as I wrote recently here.
3. Increase in the top rate to 50%. Oh dear, not enough people realise that the UK is a relative tax haven and each time the government puts taxes up, a few more foreign investors and the wealthy are deterred from locating here. Now that even the faintly left-leaning IFS tells us that by raising income tax to 45% would reduce revenue presumably that trend will accelerate. I'd love to see a study that would investigate the benefit of lowering the top rate to 35% or less.
4. Jokes - none from Alistair Darling, DC at times, lethally witty.
3.30pm
Charlie Elphicke, PPC for Dover, on Disposable Incomes
This Budget is economic madness. An exercise in denial. The country simply cannot afford to keep spending like this. Thanks to Labour we have the longest recession since WWII, the fastest ever rise in unemployment and the worst public finances in the G20. Labour has done it again. We are all paying the price. Nowhere more so than in our personal finances.
The Budget deficit is £7,000 per household next year and the same for the year after that. The economic incompetence we have seen makes swingeing tax rises very hard to avoid. Now they'd like us to talk about the 50% rate. But everyone will have massive tax rises soon enough at this rate. The 50% rate is of course a cynical and unforgivable partisan stunt. It's also the economics of the madhouse that sums up so much of what this Budget is about - putting at risk our nation's prosperity, raising no money yet cutting disposable income for the biggest spenders who keep the economy going. And it's an attack on aspiration and success to boot.
Worse, the 3.5% shrinking of the economy is a disaster for earnings. We'll have less income but, sure as eggs, our outgoings won't fall, will they? And if the catastrophic level of borrowing gives us a run on sterling - it could do so and sterling fell sharply during the Budget speech - and gilt strike problems, our outgoings and interest rates could rise a lot.
2.45pm
Andrew Lilico, Managing Director of Europe Economics, on Growth
This Budget was disappointing, even by the low standards of New Labour. Far from being "austere", it proposes an £80bn rise in public expenditure between now and 2010/11 - with an additional £20bn rise announced today! Far from being realistic, it absurdly contends that the sustainable growth rate of the economy has been unaffected by the nationalisation of the banks and a huge rise in the proportion of public expenditure in GDP!
Boringly and depressingly predictably, this Government hopes to get out of its problems via large tax rises on high earners. That can't be the right solution, even were it a solution at all (which it is not). There is going to be a terrible mess for us to sort out, and we should not feel bound by any of the terms of the debate this discredited government hopes to set.
