Citizens Advice responds to Budget

First published in News

THE Citizens Advice Bureau has today given its response to last week's Budget announcements.

It says: “There is some comfort here for lower paid workers and their families, who are struggling financially with pay freezes, rising prices and cuts to public services.

"Raising the personal tax allowance will take at least 500,000 people out of the tax net, and put some much needed money in their pockets. "The Government are to be commended for sticking to a road map which will eventually take all those earning less than £10,000 out of the tax system altogether. “But it is clear that for many working families any gains from this change are likely to be outweighed by the 1% rise in National Insurance, cuts to child tax credit and the retention of the higher VAT rate.

"The Chancellor has said this is a ‘fiscally neutral’ budget and it may well be that the final effect on the living standards of our most vulnerable people is similarly neutral.

“The extension of support for mortgage interest for another year is a welcome announcement which could help many desperate families to stay in their own homes.

"However, we are disappointed that no change has been made to the standard interest rate for support for mortgage interest which is currently below the rate most people pay for their mortgages.

“We are also pleased to see that public money will be available to help reduce water bills in the South West, where costs have been escalating and people have been struggling. This is a welcome lifeline.

“Changes to law on charitable giving will be very useful for us, such as new gift aid rules for small donations to charities, which will be simpler to administer.

“The proposal to introduce a £140 flat rate pension appears attractive. It is a sizeable uplift and removes the need to be means tested for pension credit.

"But questions remain about what happens to the people who have made contribution to SERPs and state second pension, and can currently expect a state pension of well above that amount.

“Questions also need to be asked about the planned consultation on the merging of Income Tax and National Insurance.

"For example, entitlement for a number of current welfare benefits depends on the claimant's National Insurance contribution record, and it is unclear how the proposed changes would affect these entitlements.

“We also have some concerns around the Chancellor’s proposals for reducing regulatory ‘burdens’ businesses, especially if they are at the cost of many cherished, hard-won rights and protections.

"In particular we would single out removing the protection from dual discrimination guaranteed by the Equalities Act 2010, which is a step backwards for protection in the workplace.”

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