LISTENING TO Gordon Brown’s latest Budget speech, one might be led to believe that there is a general election in the offing, writes Kathleen Coupar.

However, the main recipients of his largesse are those with young families and the pensioners; again he has done very little for the great mass of the population who have no children, or whose children have finished their education and left home, and who have not yet reached retirement age.

We have heard quite a bit about the effect the “grey vote” could have on the forthcoming election and here we have Mr Brown laying out his stall.

Measures, which apply in Scotland, include an increase in the pension credit, abolition of the clawback in pension and other benefits when pensioners spend time in hospital, continuation of the winter fuel allowance and an increase in the payment towards council tax.

Another measure announced referred to free off-peak area bus travel for disabled people and those aged over 60 from April 2006. This is a measure that refers only to residents in England. However, the Scottish Executive has been given an additional £293 million as a result of the English increases in spending in various areas including free bus travel for pensioners and the disabled and it will be for the Scottish Executive to decide how to use these funds.

Families with young children will welcome increases in Working Tax Credit, the Childcare element and the Child Tax Credit. However, there is no mention of a reduction in the paperwork for submitting claims.

Increases in personal tax allowances had already been announced in the Pre-Budget Report in November 2004 so there are no surprises there. Tax rates, national insurance rates and the bands to which they apply had also been announced.

The annual capital gains exemption has been increased broadly in line with inflation and the rates of charge are unchanged.

One area where change was hoped for was in the level at which Inheritance Tax (IHT) becomes payable. This arose because the recent large increase in the value of residential properties has pushed many, otherwise average, estates into the IHT bracket. The Chancellor has addressed this, to some extent, by raising the starting level for IHT to £275,000 from 6 April 2005, £285,000 from 6 April 2006 and £300,000 from 6 April 2007.

Whilst any increase is welcome, this does seem quite modest.

Those who are in the position of being able to save will be pleased to learn that ISAs have been reprieved for another five years, that is until 5 April 2010. The current limits will be retained; £7000 maximum and £3000 for cash.