Peopleschampion.com welcomes Gordon Brown’s electioneering budget

The Chancellor has delivered an election budget that will be welcomed by those who keep searching for good deals, says Jim Spowart, Peopleschampion.com chairman.

“In all, it was an impressive performance by Gordon Brown - with the cut in basic rate of taxation the icing on the cake. But, as ever, the devil will be in the detail,” says Mr Spowart, a fellow Fifer.

Mr Spowart reckons the new regulations on gas-guzzling four-by-four motor cars will mean that more people will now be looking at their car insurance.

“I think this is an indication of the direction that Gordon Brown, as a prime minister, will go. Green is go, so motorists who drive the ‘Chelsea tractors’ will have to look at ways of offsetting this increase. One way is finding a better deal on motor insurance. I’m sure cautious drivers will still be able to find much better deals.”

Gordon Brown announced that road tax on ‘gas guzzlers’ rises to £300 this year. The least polluting cars will have their road tax cut to £35.

Mr Spowart also welcomed the cut corporation tax from 30p to 28p which will help stimulate business.

Elsewhere, Mr Brown cut VAT from 17.5% to 5% on nicotine patches and similar products and said duty on spirits was being frozen. “A good move to discourage smokers,” says Mr Spowart.

Mr Spowart is particularly pleased that the Chancellor has increased the inheritance tax threshold from £285,000 to £350,000 by 2010 - which is good news for savers.

“I think it is more appropriate for people to have their own family savings and inheritance and use it as they wish, rather than have the government take so much,” says Mr Spowart. He added: “I am also pleased that the 125,000 people who lost their pensions because of company insolvency will get help with a financial assistance scheme increased from £2bn to £8bn. This is an equitable result, which I welcome.”

Not everyone is so please with Mr Brown though. “This budget is one in the eye for many companies in the UK. Scotland has a large proportion of small businesses, and by increasing their tax rate the Chancellor has only succeeded in making them less competitive,” claims Russell Hills, head of tax for KPMG in Scotland.

“On one hand, it rewards them with increased incentives on capital allowances and research and development. On the other, it penalises them by increasing the rate at which they pay corporation tax.”

“Despite promises to reduce complexity and administration costs, the proposed changes to income tax and National Insurance will actually increase the burden on small Scottish businesses and act as a disincentive to growing their workforce. The only certainty for small business is that the Chancellor’s changes will make them less competitive and give them too little too late.”

Other budget highlights:

• Beer will rise by 1p a pint from midnight Sunday, cider by 1p a litre, wine by 5p a bottle and sparkling wine by 7p. Duty on whisky will be frozen.
• Cigarettes to rise by 11p a packet. VAT on nicotine patches and similar products to be cut from 17.5% to 5%.
• Fuel duty up 2p per litre from October, in line with inflation.
• Putting VAT on airline tickets ruled out.
• Road tax on highest-polluting vehicles up to £300 and to £400 from April next year.

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