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Wednesday, 7 March, 2001, 06:31 GMT
Pennies and polls preoccupy Brown
Budget Scotland graphic


By BBC Scotland's Consumer Affairs Correspondent Gillian Marles

Ever since Gordon Brown introduced the cunning device of a pre-budget report, come the big event in the spring, he is in danger of repeating himself.

That may not be such a bad thing, though. Here is another chance to tell the general public what his party is doing for them and how he is going to woo them ahead of a general election.

The emphasis of budgets has slowly changed since Gordon Brown was put in charge of the red box, believes Elspeth Orcharton, a tax partner with Ernst and Young.

She says there is less focus on business measures in the actual speech. Instead Elspeth believes Mr Brown makes broad sweeping statements aimed at the general public and "the minutiae is contained in detailed press releases just after he sits down".

Mother and baby
Mr Brown will target families in his budget
The Chancellor has around 4bn to play with this time round. It may be enough to persuade dithering voters but the question is whether he can deliver a pre-election budget and keep his social democratic credentials intact.

The underlying strategy, believes Professor Wyn Grant of the University of Warwick, is to "give assistance to what are sometimes called the working poor....the group is essentially made up of people with families".

With those people in mind, Gordon Brown is expected to increase a tax break for poorer families called the Working Families Tax Credit, and introduce a children's tax credit at a higher rate than originally planned.

But some remain sceptical about the benefits of such a move for poorer households since many do not pay tax.

If they do, Elspeth Orcharton says people are often put off claiming the tax credits because the process is "a nightmare of complexity".

Minimum wage increase

She says this "is restricting the effectiveness of what it's trying to do".

The Scottish Low Pay Unit favours measures which are handed out to the lower paid workers with no questions asked.

The government announced this week the national minimum wage would rise in October to 4.10.

Fuel protestors
The Chancellor has already made concessions on fuel duty
Peter Kelly of the Low Pay Unit welcomes the increase but would like to see more.

He says that if the unemployed are to be encouraged back into the labour market "then there must be true incentives for lower paid workers".

A widening of the lower 10p income tax band may help and that is one of the measures widely tipped.

He may hail it as a tax cut for all, but it would help those on lower incomes most.

Among the main beneficiaries of the budget are expected to be mothers, who are an important group for Labour but who have become disillusioned with the government during its first term, according to many political observers.

Mr Brown is expected to raise the flat rate of maternity benefit and extend maternity leave, and he may even hand out a baby bonus worth several hundred pounds for the parents of newborn children.

Pre-election surprise

Much of the suspense has been removed from the budget with measures already announced to calm the more vociferous voices.

In November it was announced pensions were to rise and fuel duty was to be cut.

But there will of course be some rabbit pulled out of the hat. In the pre-budget statement it was a rise in the cold weather payment for pensioners; last year it was the cut in the basic rate of tax.

As this is a pre-election budget, the rabbit is likely to be a thumper. Given the fidgety nature of Gordon Brown's budgets it could be well past the general election before any of us work out whether we really are better off.

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See also:

06 Mar 01 | UK Politics
Brown to target families and the old
06 Mar 01 | UK Politics
Portillo derides 'stealth taxes'
05 Mar 01 | Business
Budget to target working mums
02 Mar 01 | UK Politics
Blair: 'No Budget giveaways'
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