Moneywise poll reveals Budget dismay
More than half of Moneywise readers have delivered a damning verdict on George Osborne's fourth budget, claiming it will not help them or the economy.
The Chancellor announced a number of crowd-pleasing measures in his budget speech on Wednesday, including a freeze on petrol duty, a 1p cut to beer duty and a new fund to help homebuyers, but a Moneywise polls shows readers to be less than impressed.
We asked what impact the Budget will have, to which 30% responded they will be worse off, it takes money from them and offers nothing in return, while 34% said "it's a missed opportunity, it will have little impact on me and won't help the economy."
Only 12% of our readers thought the Budget would be good for individuals and the economy as a whole, while 11% said they will be better off but it doesn't deal with the major issues the country faces.
To a packed House of Commons, Osborne also announced the personal income tax allowance will rise to £10,000 next April (earlier than planned), the flat-rate pension will be introduced in 2016 (a year early) and a 1% cap on public sector pay rises will remain.
More needs to be done
One reader, Eileen, said more needed to be done to address how inflation affects pensions. She commented: "Great. An extra £9 per week in 2016 instead of 2017 – that's all well and good but do people realise in three years' time, £9 is going to be worth a lot less than it is now?"
Osborne reaffirmed the Bank of England's target inflation rate of 2%, a rate Britain is currently missing as the consumer price index (CPI) measure of inflation currently sits at 2.8%.
Another reader, John Stanway, said the government's plans to guarantee loans of 20% of new build property value for struggling homebuyers could lead to another credit crunch. "Subsidise borrowers with savers' money, when too much debt caused the problem in the first place? It's madness," he said.
Moneywise readers also took issue with the Chancellor's decision to scrap the "beer duty escalator" and cut the duty by 1p, instead of the planned 3p increase. Jeffrey said: "What a waste of time. Fiddling with pennies that will make no difference to the population is an example of how inept this chancellor is."
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An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
The Consumer Price Index is the official measure of inflation adopted by the government to set its target. When commentators refer to changes in inflation, they’re actually referring to the CPI. In the June 2010 Budget, Chancellor announced the government’s intention to also use the CPI for the price indexation of benefits, tax credits and public sector pensions from April 2011. (See also Retail Prices Index).