LONDON, March 7 (Xinhua) -- The spring budget presented by British finance minister Jeremy Hunt on Wednesday, which is seen as the last budget before the next general elections, has drawn attention.
In a speech in the House of Commons, Chancellor of the Exchequer Hunt outlined a raft of measures aimed at helping the governing Conservatives stay in power at the general elections, probably in the second half of this year.
Hunt reduced the British workers' national insurance contributions (NIC), a payroll tax, to 8 percent from 10 percent, with a freeze of alcohol and fuel duties.
Steve Nolan, a lecturer in economics at Liverpool Business School at Liverpool John Moores University, told Xinhua that the measures are "fairly small beer" in terms of the magnitude of the tax cuts in the budget.
He said that a person with an annual income of 30,000 pounds (38,406 U.S. dollars) can only enjoy a tax cut of 300-400 pounds. In contrast, mortgage rates and rental rates have seen a big increase over the past year and a half.
"So people at the lower end with lower wages, this kind of thing is not going to be a reason for them to change their vote," said the economist. Although the tax cut in NIC costs about 10.7 billion pounds, Nolan said he didn't think it was going to change the dial or anything.
He said Wednesday's budget "essentially signaled that the government's not ready to go to the polls yet. It signaled that we will be waiting for a little bit longer, and it may be signaled that we can expect a bigger bazooka in the autumn."
Measures such as the NIC cut will not boost living standards significantly, according to the National Institute of Economic and Social Research (NIESR).
Living standards of the bottom 10 percent of the British households are still some 20 percent lower than the pre-pandemic levels, said the NIESR in a response to the budget.
"While increasing real wages have improved conditions for many households in recent months, long-term economic prospects will remain weak -- including the trend growth rate -- without growth-enhancing fiscal policies such as a commitment to increasing public investment," said the think tank.
Professor John Bryson from the Department of Strategy and International Business at Birmingham Business School said now is not the time to focus just on tax cuts, given the state of this country's national accounts and the need for enhanced expenditure on defense.
"Any assessment of this budget needs to focus not on the impact on job takers but on job makers and the factors that sit behind national prosperity," he added. (1 British pound = 1.28 U.S. dollars)
