BUDGET OVERVIEW: Good news for Norfolk?
Chancellor George Osborne aimed to put the economy on the road to recovery yesterday with a budget that helped motorists by cutting fuel duty, gave extra funding to the Norwich Research Park and raised hopes in the county of winning an enterprise zone and a university technical college.
In announcing an overall 'neutral' budget which was 'not tax-raising' and saying that he could not afford to make a 'giveaway', he concentrated on promoting enterprise and economic growth and on helping families struggling with increases in the cost of living.
A main focus was turning an increase of almost 5p per litre in fuel duty due on April 1 into an immediate 1p cut. This, the government said, will reduce the cost of filling a Ford Focus by �3.
Mr Osborne also suspended until 2015 the fuel escalator which has been adding 1p of duty above the inflation rate to a litre every year. These changes, costing �1.9bn in the 2011-12 financial year, will be paid for by a big increase in taxes on North Sea oil companies. The 'supplementary charge' on their production is being raised from 20pc to 32pc. But even so, said the chancellor, profits on a barrel of oil are forecast to be higher over the next five years than in the last five.
The fuel duty changes - under which the inflation part of the increase that had been scheduled for next week will now be introduced next year, and a further inflation-matching rise will follow in August 2012 - was accompanied by an income tax cut. The annual personal allowance on which tax is not paid will rise by a further �630 to �8305 in April next year after going up by �1,000 in a fortnight's time. The cost of that, just over �1bn, in 2012-13, will be more than covered by a tougher tax regime on top occupational pensions, a higher levy on the banks and a clamp-down on tax avoidance. The sources of the extra exchequer revenue - including a higher charge on non-domiciles (non-doms) who have been living in Britain for12 years - were chosen to enable the government to say it is targeting 'fat cats' and that 'we're all in it together' in the fiancial squeeze.
In a budget short on extra spending commitments, the Norwich Research Park will receive an extra �26m of funding - financed by the bank levy - and it will be visited today by science and universities minister David Willetts.
The chancellor also pledged that 11 enterprise zone areas - with special business inducements - announced in the budget will be followed by 10 more in the summer. That will be pursued by local MPs, council leaders and businessmen who are pressing for an enterprise zone in a part of Norwich.
- 1 Weather warning as thunderstorms set to hit Norfolk
- 2 Green light for park and ride, drive throughs and offices near Norwich
- 3 'We will always miss you' - tributes to QEH pharmacist who died in A47 crash
- 4 Police called to 'altercation' between pupils at Norfolk school
- 5 Fears over town gridlock as years of A11 improvement works begin
- 6 Tractor stopped on A11 found to have faulty brakes
- 7 Norfolk holiday cottage business sold to a leading lettings agency
- 8 'It's just not viable anymore' - Pub near Great Yarmouth closes
- 9 'Blood rain' could fall this week as thunderstorms move in
- 10 Long delays after person cut out of car on A1065
Hopes that a university technical college will be established in the city have similarly been boosted by Mr Osborne's statement that funding will be provided to increase the 12 such vocational training bodies already announced to at least 24.
The chancellor also cut corporation tax by 2pc rather than the previously announced 1pc from next month, undertook to overhaul the planning system to create a presumption in favour of sustained development, and said he wanted the country to become a world leader in manufacturing as well as financial services.
He had to admit, however, that the Office for Budget Responsibility had cut its prediction for economic growth this year to 1.7pc - from 2.1pc in November - and that it now expects inflation to remain at between 4pc and 5pc for most of this year.
Mr Osborne also revealed some slippage in his deficit-reduction figures. An overall public sector borrowing requirement forecast for the current financial year has fallen to �146bn from �149bn last June. But for each of the next five years the forecast is up; that for the overall deficit in 2012-13 has gone up from �89bn to �101bn.
The chancellor's action to cut the price of fuel comes, moreover, less than three months after he put 3p on a litre by raising VAT to 20pc. And his talk of bringing in a fair fuel stabiliser if oil prices fall to below $75 a barrel and stay there for three months invites the comment that it is highly unlikely to happen.
Labour leader Ed Miliband said that every time Mr Osborne spoke about growth in the Commons, it went down, and that he is practising 'Del Boy economics' But Tory and Lib Dem MPs seemed relieved and even pleased by his moves to reduce and gloss over the nation's pain.