Kevin Reed, Accountancy Age, Tuesday 22 June 2010 at 09:45:00

Chancellor George Osborne lays out a tough Emergency Budget that he claims will hit the rich harder than the poor


Chancellor George Osborne will claim today that the harshest Budget for 30 years will squeeze the rich more than it hits the poor. He will seek to sell his package of record spending cuts and tax rises as being stamped by fairness as he tries to win public support for a four-year austerity drive.

Nick Clegg moved to pre-empt any revolt by Liberal Democrats last night by insisting that his party?s values were at the heart of Osborne?s assault on the deficit. ?This is one of the hardest things we will ever have to do,? he wrote in an e-mail to party members, an acknowledgement that the pain to come will put the coalition under immense strain, The Times reported.

When he delivers the Budget statement, at 12.30pm to the Commons, Osborne will insist that everyone is making a contribution as he tries to distinguish his measures from anything that Labour could portray as a Thatcherite attack on the poor.

A table in the Treasury Red Book, broken up into ten different income bands, will show that the wealthiest will be hit proportionately hardest, according to The Times. This does not factor in how cuts to public services will affect different parts of the country and income groups, nor does it include the Government?s impending drive on benefits.

The Budget will take 880,000 people out of income tax altogether by raising the threshold at which tax is owed by 1,000. Future Budgets will raise the threshold, taking hundreds of thousands more out of income tax ? a key Liberal Democrat policy.

A key Tory policy ? saving employers the cost of national insurance contributions ? will mean that 650,000 workers will be exempted by raising the earnings threshold at which bosses have to start paying.

Further reading:

Osborne plans NIC break for new companies in deprived areas

Capital gains tax plans sour for Alan Sugar