Pre-budget report: Reaction

Today’s statement by the chancellor was not a painless PBR, but it was a responsible one

The PBR needed to focus on growth and getting the deficit down. Today Darling did that. Here are my highlights:

Support for small businesses: With a freeze in corporation tax, increasing the threshold for empty property relief and extending the loans guarantee schemes small businesses have received a welcome fillip of support. Small businesses are the backbone of our economy and this will ensure that they are at the forefront of the recovery too.

Youth unemployment: With more support for jobs and training Labour today has made it clear that we will not condemn a generation of young people to the scrapheap as the Tories did in the 1980s and ‘90s. Youth unemployment has risen fast in this recession and Darling is right to ensure that we do everything we can to get young people into high quality jobs.

Low carbon economy: In the week that the Copenhagen summit gets underway Darling showed that he recognises that greening our economy will help create the jobs of the future. Support for green technologies and the boiler scrappage scheme that will make our homes more environmentally friendly are both economically and environmentally the right thing to do.

Deficit reduction: We all know that we need to bring down the deficit. Spending now is getting the economy back on track and will avoid the double dip that Osborne’s reckless cuts mantra would be sure to bring. But going forward the books do need to balance. The Tories say we’re all in this together but it’s Labour today who put that soundbite into practice. Tough action on non doms, a freeze in inheritance tax and a 50|% tax on bonuses of more that 25k mean that it is those with the broadest shoulders who are contributing a bit more to reducing the deficit. The Tories continue with their position to give a tax break of £200,000 to 3,000 millionaires by raising the inheritance tax threshold to £2m, at a time when everyone else is struggling to make ends meet. I expect the Tories will oppose the tax raising measures in today’s PBR – the Tory funders in Belize and Richmond won’t want to see their fortunes being used to reduce the deficit. But to avoid the poorest paying the highest price for a recession that they did not cause we must ensure that spending cuts are balanced with tax increases.

Today’s statement by the chancellor was not a painless PBR, but it was a responsible one. The dividing lines are getting clearer and voters are being offered an increasingly stark choice at the next election.

Rachel Reeves is Labour’s PPC for Leeds West

09 Dec 2009 15:17

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