Author: Great Britain: Parliament: House of Commons: Treasury Committee

Publisher: The Stationery Office

Published: 2010-07-23

Total Pages: 116

ISBN-13: 9780215554376

In this report the Treasury Committee examine some of the risks and uncertainties in the approach taken by the Chancellor in the June 2010 Budget. The June Budget was more radical towards debt reduction than that taken by the previous government, but it also signalled a move to rebalance the economy away from the public and toward the private sector. The Committee expresses concern that there might be a slight increase in the chance of near-term negative growth, and that the Office for Budget Responsibility's independence has been called into question. It notes that net trade is not expected to contribute positively to GDP growth in 2010, and that the VAT increase will affect inflation. On welfare, the proposals to reduce housing benefit for Jobseeker's Allowance claimants after one year will affect some 300,000 people, and the Committee calls for fuller information about those affected, especially households with children. The aim to make the measures fair in absolute terms and as a proportion of income is supported, though the Committee is concerned that the poorest fare slightly less well than middle income groups. The inclusion of charts showing the distributional effects of the Budget is welcomed. The Committee also comments on the problems faced by small and medium sized enterprise in raising credit and on the bank levy. The Chancellor's statement that he has built an element of caution into the fiscal mandate is taken as a signal that he would introduce measures to stimulate the economy if economic conditions demanded.