Robert Powell takes to the streets to get your take on the 2012 Budget...
So George Osborne has delivered his third budget as Chancellor. A budget he says rewards work; is on the side of aspiration and unashamedly backs business.
But not everyone feels so positively about the contents of the Chancellor’s red Budget box.
The post-Budget headlines almost all focussed on the key themes of tax cuts for the rich – spurred on by the cutting of the top rate of tax – and tax rises for the old: in light of the much-maligned ‘granny tax’.
Though on the plus side, the tax free allowance will be upped to over £9,000 from next April – a move both the Tories and Lib Dems are claiming as their own.
But what did the public think of this year’s monetary road map. I’ve hit the streets to find out.
Personal tax
The political centrepiece of this budget – especially for those wishing to put the boot into the Conservative Party – was the slashing of the top rate of tax to 45p from next April.
The Chancellor claimed the 50p rate damaged the economy and raised next to nothing. But many opponents of the government seized on the move as an example of the Tories simple looking after their millionaire mates.
And this wasn’t the only change to the income tax system.
The amount low and middle income earners can receive before they pay income tax will increase to £9,025 next April – leaving basic 20% tax payers £170 better off in real terms.
However the level at which the 40% band kicks in will be cut by over £1,000 to £41,450 from next April – pushing 680,000 workers up a tax band.
And middle-income pensioners will also lose out as their personal allowance is frozen in 2013. Dubbed the ‘granny tax’ more than 4.4 million existing pensioners will be affected, losing an average of £83 a year, while people who retire in 2013 stand to lose up to £322 every year.
So with all this tax tinkering – has the budget really made us better off?
Will this budget make you better off overall?
In the run-up to this budget, child benefit – due to be axed for any household in which someone earned over £42,475 – was a prime concern for many.
In response, the Chancellor raised the point at which the benefit is set to be binned entirely. Those households in which one partner earns £60,000 will now lose the payment. He also said that it would be withdrawn gradually at the £50,000 mark.
It was also a bad day for those who enjoy a frequent smoke or drink. A pack of 20 cigarettes had 37p added onto it in tax, while the increase in alcohol duty laid out last year was frozen: pushing booze prices up by 5%.
Cigarettes and alcohol
The booze tax rise is predicted to hike the average cost of a bottle of wine up past the £5 mark and push average price of a pint to £3.17.
And this wasn’t the only luxury hit by increased taxes.
Dubbed the ‘pasty tax’ – VAT was also slapped on hot food bought from bakeries and supermarkets for the first time.
This will push up a Greggs Sausage Roll by 18p, add 30p to a £1.50 pasty and increase the price of a £5 rotisserie chicken by £1.
But one tax that wasn’t tinkered with at all was Fuel Duty – and that’s bad news for motorists as it means the 3p tax rise planned for August will now go definitely ahead.
Fuel duty
The rise in fuel duty is predicted to take petrol prices up to around 145p per litre and diesel to 150p per litre.
Bad news for drivers, as prior to the budget, research from the AA found that 4% of members would change jobs to reduce mileage if the tax rise went through. While 3% said they would have to abandon their job altogether due to unaffordable fuel costs.
No pain, no gain
For many ordinary consumers, this budget will be a bitter pill to swallow.
But that doesn’t mean it’s not a gamble for the government as well.
The Chancellor says the budget proves that Britain is open for business. A sign sent out through tax cuts for high earners and small businesses.
But someone has to pay for those cuts. No pain, no gain you might say.
However with pain gripping the nation tighter each day, the Chancellor will be hoping the gain arrives, and arrives soon. As if it doesn’t, it could be his government fighting to stay open for business come the 2015 election.
What’s your take?
How will the budget hit you?
Let us know using the comment box below.
More: Budget 2012: what it means for you | Budget 2012: the speech in full