MAIN BUDGET POINTS and reactions – NEW FULLER VERSION

The Chancellor targeted families in probably his last Budget
before the general election.

Gordon Brown said his Budget “puts families first” with
increases in child care allowances, and child benefit and the
introduction of a new children’s tax credit.

For parents of new-born children the tax credit will be higher
than for other families, and he also improved maternity and
paternity benefits. There was an increase in disability tax
credits.

Pressure from older people has paid off with an announcement of
pensioner tax credit increases being linked to earnings.

A new multi-million pound campaign to tackle drug abuse will
feature high profile celebrities and sports stars.

The Budget contained increases in both NHS and education
spending, and tax breaks such as the abolition of stamp duty to
promote housing activity in regeneration areas.

Figures for the increase in national social services spending
were announced in last year’s comprehensive spending review. An
increase of £2.8 billion over three years was promised, which
represents a 29 per cent increase, but it included a large transfer
of cash from the department of social security for people on
preserved rights.

Summary of main points:

– an increase of 3.7 per cent per year on public spending by
2003-4 rather than previous commitment of 3.4 per cent

– increase in new children’s tax credit from £8.50 to
£10 per week when it is introduced in April. Increase in
credit to £20 per week from April next year for first year of
a child’s life

• extra £5 per week on the basic credit in the working
  families tax credit from June this year
• the child care tax credit within the working families tax
  credit to rise from £100 to £135 a week for a family with
  one child and from £150 to £200 per week for a family
  with two or more children
• a staggered increase in maternity pay from £60.20 to
  £75 per week next year and £100 per week in 2003. An
  extension in the period of maternity pay from 18 to 26 weeks from
  2003
• two weeks of paternity leave from 2003
• a £200 increase in the Sure Start maternity grant to
  £500 from April 2002
• an increase in the age-related income tax allowances for
  pensioners by £240 above inflation from 2003
• national minimum wage to increase by 40p per hour from
  £3.70 to £4.10 from October, and, depending on economic
  conditions, to £4.20 in October 2002
• £10 income tax band to be extended by £300 more than
  inflation from April

Reaction:

Gary Vaux, welfare rights expert and Community
Care columnist, said: “It is a budget for low paid workers. There
are lots of good things for working families particularly on lower
incomes.

“But it is a disappointing budget for what is doesn’t do. It
doesn’t address issues around pensioner poverty, disabled people
who are not working and non-working families.”

Jon Glasby, a qualified social worker and
co-author of a guide to local government finance for social workers
(Paying for Social Services) said: “This is not a giveaway budget.
The Chancellor has chosen to spend the surpluses he has on public
services.”

He said the way the government has decided to pay money direct
to schools and hospitals reduces the scope for local discretion,
which could affect the money allocated to social services.

“Is this part of an agenda to abolish local government and merge
social services with health?” he speculated.

Brian Parrott, who is chairperson of the
Association of Directors of Social Services’
resources committee, said: “We are interested in
the extra £835 million for the NHS over 3 years, especially
the part of it which links to staff recruitment.

“We will be interested to see whether within the allocation to
health (or indeed elsewhere) there is anything for social care,” he
said.

“An area of concern for directors is about the rise in the
national minimum wage. Whilst obviously very welcome in terms of
its impact on low pay, for many local authorities, particularly in
low pay areas, it may mean higher costs, especially in purchasing
and providing residential and domiciliary care services.”

Barnardo’s said the Budget would do little to
lift children out of poverty. Neera Sharma, policy officer, said:
“These measures will not deliver on the government’s aim to wipe
out child poverty. They will boost the incomes of families in work,
but do nothing for families where the parents cannot work.”

But The Daycare Trust was pleased with the
Budget, which it said would help reduce child poverty. The increase
in the child care tax credit was particularly important the trust
said.

Maureen O’Neill, director of Age Concern
Scotland, described the Budget as “a missed opportunity”
to give older people the priority they deserve. She said the
Chancellor had the money to link pension rises to earnings.

Mervyn Kohler, head of public affairs for Help The
Aged, said: “Pensioners may be content with the
Chancellor’s short term announcements, but there is little sign of
a viable long term strategy for pensions or for the potentially
catastrophic costs of care for individuals.”

He said the minimum income guarantee and the pension credit draw
more older people into means testing.

The RNIB was equally disappointed. Steve
Winyard, head of policy, said there were no measures to help lift
disabled people out of poverty.

He condemned the government’s failure to extend the winter fuel
allowance to disabled people receiving disability living
allowance.

Dave Prentis, Unison general secretary, said:
“pensioners and families are in the front line to benefit from the
Budget”. He particularly welcomed the increases in the children’s
tax credit, and the maternity and paternity leave
announcements.