Budget boosts Big Society, but no let up in cuts

Chancellor George Osborne’s Budget today boosted the Big Society with new Gift Aid proposals and took forward plans to increase taxes on super-strengh beers, but there was no let up in the government’s programme of cuts.

Charities will be allowed to claim new Gift Aid on up to £5,000 of small donations per year, while the Gift Aid benefit limit is increased from £500 to £2,500 from April 2011 as part of an attempt to support the voluntary sector. Osborne said this was “a big help for the Big Society.”

As previously signalled, an additional duty will be introduced on beers over 7.5% alcohol by volume, equivalent to an extra 25% on standard duty from October 2011. General duty is also rising by 2% above inflation from next week.

The move was welcomed by the Royal College of Psychiatrists though it bemoaned the lack of action to increase taxes on cider, which are relatively low compared with beer duties.

Osborne was also criticised for not announcing any change in his austerity measures that have seen many frontline social care services cut by councils.

David Congdon, Mencap’s head of campaigns and policy, said: “The Budget today does little to ease our concerns about the future of frontline services.

“Although the government has said that these services should be protected, we know that local authorities are already cutting vital care and support for people with a learning disability.

“We regularly receive calls from people with a learning disability and their families who feel terrified about the cuts and the impact it will have on their lives.”

Osborne said with growth forecasts being downgraded from 2.1% to 1.7%, the government was unable to give away much, but did not have to raise new taxes as he unveiled his “Budget for growth”.

As anticipated, he announced the launch of savings accounts for children in care. He also announced help for struggling families, through measures such as the council tax freeze and more child tax credit for lower income families and a pay lift for public servants on less than £21,000.

Pensioners and the low-paid gained some benefits through a rise in the personal tax allowance by £630 to £8,105 next April, which had been widely trailed, meaning that 1.1 million lower paid people have now been taken out of income tax altogether.

He signalled that the state retirement age will be increased and that a single-tier state pension will be introduced, worth some £140 a week. He also signalled a cut in employment regulations that has raised concerns among some disability groups.

This will take years to come into effect and will not apply to current pensioners.

The government will also be consulting on merging national insurance and income tax. However, he insisted the contributory principle was not being abolished nor would national insurance be extended to pensioners.

“It’s time we take this historic step to simplify our historic tax system and make it fit for the modern age,” Osborne said in Parliament today.

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