"2p tax cut hides £31.5 billion tax hike" - Bruce

4.54.33pm UTC (GMT +0000) Wed 21st Mar 2007

Mr Brown's Budget will leave many low-income earners paying more income tax

Reacting to the Chancellor's final Budget statement, Gordon MP and former Liberal Democrat Shadow Chancellor, Malcolm Bruce said:

On Income tax changes:

"The headline cuts in income tax involved in Mr Brown's final Budget trick only thinly disguise the huge rise in income tax and national insurance he will collect over the next two years.

Those on lower incomes are especially short-changed. By merging the tax bands, the Chancellor has doubled the starting rate of income tax from 10 to 20%. This will mean that anyone earning less than £15,000 will actually end up paying more income tax.

"The combination in Income tax and National Insurance revenue will add an extra £31.5bn to the Treasury's coffers over the next two years. This is far from a tax-cutting budget."

On Oil and Gas:

"The reduction in projected revenues from North Sea oil and gas indicate that it is becoming harder and more expensive to extract oil and gas. This reinforces the need for the Chancellor not to attempt to claw back more revenue which could undermine the industry as well as driving potential investment elsewhere. The industry already pays more corporation tax than other sectors and doesn't benefit from the cut"

On Carbon Capture:

"The announcement that the DTI is to launch a competition about whether or not to go ahead with Britain's first full-scale carbon capture and storage demonstration leaves the issue unresolved and if and when a decision is taken, the fear is that it will be too late."

On Security:

"The security consequences of the Iraq war are all to clear now with the country's security budget needing to be doubled. By the Chancellor's own admission, security expenditure has increased from £1bn to £2¼bn over the last five years. All this and we haven't even started to count the cost of identity cards which will add billions more to the price tag."

On Freeze on spirits duty:

"I welcome the freeze on spirits duty, as I'm sure will our local distilleries who face ever increasing energy costs as well as a tough export regime with the strong pound."

On Aggregates levy:

"The increase in the aggregates levy will penalise building in more remote areas and will damage the environment as recycling costs will become inadequate given the extra expense of transportation in rural areas."