Monday, 26 March 2012

The Budget

Many people in my constituency work in public services and all, apart from those earning less than £21,000, are facing another year of pay freezes. I also know that many people in local businesses are also not getting pay rises. That is why I am very pleased that in the Budget last week the Chancellor increased the amount of money people earn before they pay tax.
It rose to £9,205, which for an average person or family will mean a saving of £220 a year. The aim is to get to £10,000 as soon as possible.
I was however disappointed that fuel tax will go up by 3p in August. For the past two years, the Chancellor had frozen the fuel duty rises planned by Labour saving the average family £144. I will not stop arguing for my constituents who are particularly hard hit by high fuel prices. In the debate on the Budget I specifically asked the Government to refer the high local pump prices to the Office of Fair Trading. Pump prices in regions like Cornwall are much higher than the UK average, indicating that the regional fuel market is not working in the best interests of customers.
Two years ago I made similar representations to Ministers about shocking rises in heating oil prices. An enquiry by the OFT followed, action was taken and thankfully this winter we did not see a repeat of rapid price hikes.
This week the basic state pension will rise by 5.2% up to £107.45 a week, an increase that will amount to an extra £275.60 in the pockets of pensioners over the next year.  The married couple’s pension will also rise, from £163.35 to £171.85.
This is due to the Government’s imposition of a ‘triple lock’ on the state pension, ensuing that every year the state pension will rise in line with either wages, inflation or 2.5 per cent – whichever is highest.
A range of other benefits for older people, including the free bus pass, warm home discount, free prescriptions, eye checks and Winter Fuel Payment, remain.  
However, there will be a change to the tax system for pensioners - in the future, as the personal allowance (the money you can earn before you pay tax) increases, it will become the same however you earn your money – whether through paid employment or when you are a pensioner from income on savings or investments. At the moment it is higher for pensioners. No pensioner who currently receives the higher allowance will lose it. It will be frozen at the current level. This effects less than half of all pensioners as most do not pay tax at all.
These are very tough times and all the ‘grannies’ and for that matter grandfathers I know care more than anything else about their children and grand children. They know that we have to get the economy sorted and the country back on its feet so we all have a future to look forward to.

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