Budget: the reactionsBy Hugh Fort
April 29, 2009
Alistair Darling's Budget announcement has sparked wide criticism from the people of Wokingham.
In his speech in the Commons last Wednesday, the chancellor announced a record £175 billion worth of borrowing, as well as hikes in the price of cigarettes, fuel and alcohol.
Across town, pub landlords, politicians business owners and estate agents reacted negatively to the Budget annoucement.
A poll on getwokingham suggests almost 60 per cent of people believe the decisions will not make any difference to their situation, while 23 per cent supported the higher tax rate for the country's richest.
The announcement means an increase in alcohol and cigarette prices of two per cent.
From September fuel tax will rise by 2p, with an additional rise of 1p a litre in April for the next four years.
Other new schemes include a car scrappage scheme where motorists get a £2,000 discount on new cars if they trade cars more than 10 years old and a rise to 50 per cent of income tax on people earning more than £150,000.
What do you make of the Budget? Have a say here.
Reporter Hugh Fort spoke with the people affected in and around Wokingham.
Landlords in Wokingham have slammed the increase in alcohol tax and say their prices will go up more than the suggested 1p.
Andy Rogers, landlord of The Redan in Peach Street, said: “We think it’s ridiculous.
“On one hand, there’s a lot of noise about helping small businesses but most pubs are small businesses and they’re not helping us.
“They say it’s only a rise of 1p but it’s not.
“No-one wants to put it up by that much because it means a till full of pennies and customers walking round with pockets full of change.
“We’ve been desperately trying to keep our prices stable and we have done for the last year, but we will have to put them up now or we won’t make any money.”
Paul Woodford, who runs The Three Frogs in London Road, added: “It’s certainly annoying for my customers.
“They say it’s 1p but it won’t be as everything has a knock-on effect and they are already putting up fuel prices so deliveries will be more expensive.”
Wokingham MP John Redwood has repeatedly criticised Government spending in the past and is once again unhappy with the budget.
In the budget debate on Wednesday, he said: “Our constituents, by and large, pay the bills, go to work, work hard and are prudent and save – they do all the things that, we hope, Governments of all persuasions wish them to do – but we are the ones who get socked with tax bills and we do not get any of the extra money if the Government is thinking of money for better schools or hospitals.
“I do not think that these ministers have a clue how tough it is out there for private sector businesses, I don’t do not think that they have any idea what it is like for businesses of just four or five people, where those running the business are close friends with the individuals whom they are employing.
“They are the people who are facing this huge rash of extra bureaucracy, extra regulation and changed tax rules that makes their lives even more difficult at a time when they need to concentrate on sorting out their business.”
Mr Darling’s proposals to create jobs and stimulate business have drawn a mixed reaction from business groups.
Claire Prosser, policy executive for Thames Valley Chamber of Commerce welcomed the car scrappage scheme and the new ‘top up’ trade credit insurance scheme, aimed at helping small businesses.
The new scheme means can use the insurance to cover themselves in case they are not paid for the goods they sell.
She went on to say the group has reservations on the new tax for people earning £150,000 would “weaken the UK’s positions as a global player” and would mean the UK could no longer attract the highest skilled workers.
But Mary Flavelle, from the Federation of Small Businesses, said: “The budget didn’t really have anything in it for small businesses.
“Small businesses need to be taken a damn-sight more seriously that this government are doing.
“Gordon Brown has made all the right noises when it suits him, but now, when it’s time to put his money where his mouth is, his mouth is shut.
“There should have been more emphasis on keeping trade local.”
An estate agent says the extension of stamp duty holidays for houses costing up to £175,000 “won’t make any difference to the people of Wokingham.”
Neal MacKenzie, managing director of Michael Hardy Estate Agents in Broad Street, said there are so few houses in the borough of that price that the extension would not have an effect on the flagging property market.
Mr Darling also announced £100 million for councils to apply for build energy efficient homes.
Councillor David Lee, leader of Wokingham Borough Council, said the council was looking at applying for a chunk of the money, but denounced the rest of the budget as “rubbish”.
He said: “I have asked Susan Law, the council’s chief executive, to investigate getting some of this money to build energy efficient homes.
“We’ve always had a bit of a problem with getting grants from the Government but we are going to look into it.
“The rest of the budget is rubbish.
“The Government, like a lot of people, has been spending well above its means and is now having to try to claw it back.”
The scrappage scheme has been used successfully in Germany, but car salesman are warning the funds are limited.
Experts in the motor trade say the £300 million put forward by the Government to fund the scheme is unlikely to last until the deadline in March next year.
Peter Rand, managing director of Wokingham Motors in Molly Millars Lane, said: “The scrappage scheme is a good thing for the industry, which has been in the doldrums for some time.
“It is really good for the customer, as they will get £2,000 off a new car.
“What might be a problem is that the manufacturing industry has slowed so much.
“People may go for the scheme, decide what they want, and then have to wait for it to be built.
“The other issue is the limited money which I can’t see lasting until March.
“But the scheme is very positive and another point to make is that people will be replacing old cars with new ones, which will have a huge benefit to the environment as new cars are designed to be more green.”
Relatively few changes have been made in the budget to the benefit system.
One change is a rise in child tax credits of £20, which John Ferguson, manager of Wokingham Citizens Advice Bureau in Market Place, says could cause problems for people eligible.
He explained: “Tax credits are horrendously complicated to try to get your head around and every time changes are made to that we get a lot of people coming who don’t understand.
“Other than that, the budget has not really affected benefits a great deal.”