Martin Salter, Labour MP for Reading West has spoken out in support of Chancellor Alistair Darling’s Pre-Budget Report (PBR). 

In this crucial mini-Budget the Chancellor of the Exchequer has announced a range of measures to help the British public weather the current financial crisis and stimulate the economy with a £20 billion fiscal boost. The plans include a temporary reduction in VAT from 17.5% to 15%, effective from 1^st December to last until 31^st December 2009 in order to ease the pressure of Christmas spending and boost the economy.

The Chancellor also announced that the top rate of income tax would be raised from 40p to 45p in the pound from April 2011, whilst there will be targeted tax cuts for people on low incomes. Basic rate payers will receive an extra £145 in 2009, up from this year’s £120. From next April single pensioners will see their weekly pension payments rise by £ 4.54 to £95.24, while pensioner couples will see a rise of £7.26 to £152.30. There will also be a one-off £60 payment to every pensioner as well as to the severely disabled which is equivalent to bringing forward the annual increase from April to January. Similar measures will be applied to the increase in Child benefits.

Mr Darling has also instructed banks to give struggling homeowners three months’ grace before repossession proceedings start. He will also extend government-backed mortgage rescue schemes, which aim to keep low-income borrowers in their homes. The PBR reversed an earlier decision to backdate increases in Vehicle Excise Duty for older vehicles, which Martin Salter campaigned against, speaking in the Commons debate and signing Early Day Motion 1464 ‘Vehicle Excise Duty’.

By announcing that all cars registered between 2001 and 2006 will now pay car tax at the Band K rate of £215 from 2009 the Chancellor has effectively removed the controversial retrospective hike in VED for second hand vehicles. The original proposal could have seen VED for the most fuel inefficient cars rise to £440. The new bands will, however, still apply to new vehicles.

In terms of support for small businesses Mr Darling also announced the Small Business Loan Guarantee Scheme, ensuring that Britain’s small companies get their fair share of Whitehall procurement projects and underlining the government’s determination to ensure that banks pass on lower interest rates to business customers.

Speaking from Westminster after the Chancellor’s House of Commons’ statement Mr Salter said:

“I am extremely pleased with this comprehensive range of measures put forward by the Chancellor. It strikes the correct balance between offering help to those who will be hardest hit by the global financial crisis and providing a stimulus package for the economy. I am particularly pleased to see the inclusion of plans to prevent home repossessions and the postponement of the Vehicle Excise Duty, which I have campaigned against for some time and which could disproportionately affect the poorer motorists who cannot afford to change their cars every two or three years.”

Mr Salter added;

“I am also very encouraged by practical short-term proposals, such as the VAT cut which will benefit poorer families who will feel the effect of the money the Government returns to them over the Christmas period.  I also commend the government for its decision to pay for some of these benefits by increasing the top rate of tax paid by the top 1% who earn over £150,000 per year. It is only right that the very wealthy play their part. These measures will help hardworking families and those on low and modest incomes and reassure people in difficult financial circumstances that this Labour government is on their side.”