Budget Falls 'Well Short' of What Was Possible
7 Dec 2006
Congress has expressed disappointment with the provisions of Budget 2007, saying they fell "well short" of what was possible.
Congress General Secretary David Begg said: "There are positive measures here, but overall this is a budget that falls well short of what was possible and, indeed, necessary. In our view it is a budget that is compromised by political considerations.
"Given the context - the massive resources available to this government - there are far too many measures here that benefit the better off, disproportionately. For example, the money misspent on cutting the top tax rate would have been better concentrated on further widening the tax bands.
"Equally, it was wrong to restrict the new payment for children in poverty to those on social welfare - this should have applied to all lower income families, particularly the estimated 160,000 working people at risk of poverty. This is a matter we will be raising with the government, as a matter of urgency. The failure to deliver anything to improve the affordability of childcare is particularly disappointing.
"It is also remarkable that the Minister chose to extend the Business Expansion Scheme at a time of huge growth. This is no more than increased state aid for business at a time when they least need it. It also greatly increases the capacity for tax avoidance, allowing many more millionaires to pay no tax.
"Congress also believes it is grossly irresponsible to purchase 18m tones of Carbon Allowances. This is another subsidy to business, with the taxpayer footing the bill. And you cannot buy your way out of the crisis facing the environment. This makes a mockery of the 'green agenda'."
Mr Begg noted that Budget 2007 contained some positive measures: "We do welcome the changes to the R&D Tax Credit regime; the decision to pay the minimum wage recommended by the Labour Court and the initiative on Mortgage Interest Relief for homebuyers."