Brown finishes with a Jobs
The Chancellor’s been watching Steve Jobs, the maverick boss of Apple. In his final budget, Brown saved the big news until the end, just as Jobs always does – a 2p cut in the basic rate of income tax. It’s not a new iPod, but the iPod generation will be happy…
...until they see the small print. Less trumpeted was the scrapping of the lower rate of income tax at 10p. So the cut in the basic rate of income tax will be almost ‘revenue neutral’. Put in laymans terms, the BBC reckon Brown will get £8bn more by cutting the lower rate, but lose £9.5bn by reducing the basic rate. The £1.5bn will probably be made up partly through a rise in small business tax – sure to be controversial – and by selling more government buildings and the student loans, both short-term gains.
I still don’t understand why tax on beer and wine goes up by 1p per pint or 5p per bottle, yet spirits – which surely contribute to anti-social behaviour as much as beer – is frozen. Measures on the environment will be welcomed, but are hardly radical. The inheritance tax threshold went up to £350,000 (by 2010), by which time many houses will cost that much.
It was a big-headline budget, but beneath the surface, Brown did little more than tinker at the margins. As Menzies Campbell said, it was a budget of a man ready to move on.