After the first few weeks of Parliamentary business have been dominated by the Government delivering on its pledges to devolve more powers to Scotland and give us all a say on our membership of the EU today we have the second budget of the year.
It will be the first all Conservative budget since the end of the 1992 – 1997 Parliament. I expect to see the Chancellor start to deliver on the pledge to ensure the Country starts to live within its means. As a country we simply cannot continue borrowing every month to pay the bills. It means adding more to the accumulated national debt every month. a bigger national debt means ever higher interest payments.
The Conservative manifesto contained a pledge to increase the amount people can earn before starting to pay tax to £12,500 and I expect to hear more today about how the Chancellor plans to move towards that figure.
I have long held the view that one of the biggest problems any Government faces is the length and complexity of our tax laws and I hope the Chancellor takes steps in this first budget of the new Parliament to simplify the tax system.
This has been a most unusual week in Parliament. On Tuesday we had the Queen’s Diamond Jubilee address to both Houses of Parliament held in Westminster Hall. I was fortunate to secure a ticket both for the address and the Reception afterwards where I was presented to His Royal Highness Prince Philip. I thought the Queen struck exactly the right note and it was certainly a memorable morning.
On Wednesday it was back to normal politics and the Budget Statement. Thousands of families on basic rate tax will have an extra £220 a year to spend as a result of the increase in the personal allowance.
The announcement of a further reduction in corporation tax was particularly welcome as we need profitable companies to create new jobs. The news that GlaxoSmithKline are going to build a new factory here in the North West and creat hundreds of new jobs was hopefully a first sign that corporate Britain will react positively to this news.
I have always maintained that what makes a good budget is not how it is reported in the media in the first 24 hours but how it is viewed after the analysts and experts have had chance to study the small print. I think that this years budget will be regarded as being the right mix of carefully targeted measures designed to boost private sector growth combined with the economic imperative of ensuring the budget deficit is one day eliminated.
Motorists will be glad that for the first time I can remember the price of petrol following the budget has gone down instead of up.
Those who complain about the complexity of our tax code will be pleased that swathes of complex rules and regulations are to be abolished.
The long term plan to merge tax and national insurance contributions is the first step on what I guess will be a long road which will really start to reduce the size and complexity of the tax system and ultimately make it easier for employers to employ people.