Party spokesmen debate the impact of chancellor Gordon Brown's Budget and detail their plans for the future.

Labour: Treasury minister Paul Boateng

The priority of any government must be to maintain macroeconomic stability that can and will endure.

At the time of this 2005 Budget, the tough decisions taken since 1997 have enabled the UK – once the stop-go economy of the world, to profit from the longest period of sustained economic growth since quarterly national accounts data began 50 years ago, with GDP now having grown for 50 consecutive quarters – despite a challenging period for the global economy.

By 2002-03 there were half a million fewer children in relative low-income households compared to 1998-99.  The proportion of pensioners living in low-income households (measured after housing costs) has dropped by roughly half a million between 1997/8 to 2002/03.

And this Budget announces further measures to help families and children. Increasing the child element of the child tax credit means that the effective income tax rate for a family with two children earning £25,000 a year will be just 6 per cent, and at £30,000 just 10 per cent – a family tax cut that does most to help low and middle income families.
 
The Budget also provided more help for pensioners – free off-peak local bus travel from next year for every pensioner in their area. And in recognition of the fact that pensioners who are on fixed incomes face ongoing pressures from even low increases in council tax bills, we are providing a payment of £200 to every pensioner of 65 or over living in a household paying council tax.

And for those seeking to buy a home, we are doubling the point at which any stamp duty is paid from £60,000 to £120,000.

The Budget demonstrates that it is only through our commitments: Economic stability - not short-termism, investment in public services - not £35 billion cuts, and employment opportunity for all that we can deliver security, prosperity and fairness for all.

Conservatives: Shadow chancellor Oliver Letwin

It was no surprise to see some sweeteners in this budget. This was, after all, a pre-election budget, designed to win votes. But I am afraid it was a ‘vote now, pay later’ budget.

We think there is another way. We agree with the government that we need to increase spending on key public services.

But we also want to spend within what the nation can afford, so that we can have lower taxes.

You may ask how we can both spend more on key public services and yet have lower taxes.

The Conservative solution is to spend on things that matter to the majority of people and cut back on the rest. We will spend the same as Labour on schools, hospitals, transport and international aid, and slightly more than Labour on police, defence and pensions. But we will save £12 billion a year by cutting back on the size and cost of government.

We will use eight of the £12 billion we save to reduce Labour’s borrowing and avoid Mr Blair’s post-election tax rises. We will use the remaining £4 billion of savings to cut taxes in our first budget. One of those tax cuts will be to halve council tax for pensioner households aged 65 and over.

That is a genuine, sustainable and permanent tax cut, unlike the one year only allowance for pensioners in the Chancellor’s Budget.

There is a clear choice for electors at the next election. People can vote for more taxes, and more wasteful spending under Mr Blair, or they can vote for a Conservative government which will spend on the key public services, but which is determined to get better value for money by cutting back on wasteful spending in other areas, so that we can have lower taxes.

Liberal Democrats: Treasury spokesman Vincent Cable

Over the last eight years the chancellor has consistently tinkered with the tax system, but he has failed to tackle fundamental unfairness in the system. Although there are admittedly winners under this Budget, it fails to tackle the root problems of an unfair taxation system, and the gimmicks he has used to hide this fact merely complicate the tax system further.

Mr Brown offered pensioners a £200 pay-off for one year only, but at the same time failed to address the likely tax rise that will come with council tax revaluation, due to start on 1st April. The Welsh experiment suggests that seven million people in England will pay significantly more after revaluation.

The government cannot keep on patching up this unfair tax. This is why we propose abolishing the council tax system and instead administering local income taxes based on an ability to pay. Under such a system the typical household will be better off by over £450 per year, with six million pensioners not paying any local income tax and an average single pensioner benefiting by £209 a year.

This Budget, however, lacked not only fairness but continued the trend of complexity and ducking tough choices.

As a government the Liberal Democrats would be prepared to make these tough choices, switching government spending from low to high priorities. We would make £5bn of savings from areas such as the scrapping of the DTI, ID cards and child trust funds, which would go into pensions, policing and education.

It is these choices which are necessary to ensure both future service provision and economic prosperity, not the mixture of gimmicks and half-promises we saw in Mr Brown’s latest Budget.

These comments are edited versions of articles which first appeared in The House Magazine.