Wednesday, March 24, 2010

This is going to hurt, though it could be worse

Source BBC.

Here are the key points of Chancellor Alistair Darling's 2010 Budget, the last one before the general election. 

3p fuel duty rise to be phased in between April and January 2011
Duty on cider to rise by 10% above inflation from Sunday
Wine, beer and spirit duty up 2% a year until 2013
Tobacco duty up 1% this year and 2% a year in future years 
Usual stuff, hitting common pleasures of the people, the cider bit is a sop to the anti-drinking culture brigade who see White Lightning as the scourge of the street chavs. All in all it's the usual blanket stealth tax so favoured by UK governments.

Stamp duty scrapped for homes below £250,000 for first-time buyers
Stamp duty on residential property sales over £1m to increase to 5% 
Nabbing a Tory policy and claiming it's a Labour one.

Economy contracted 6% during the recession
Predicted growth of 1-1.25% in 2010, in line with forecasts
Downgrades growth forecast for 2011 to 3-3.5%
Borrowing this year forecast to be £167bn - £11bn lower than expected
Borrowing to fall from £163bn in 2010-11 to £74bn by 2014-15 
Slow but sure emergence from the recession, hampered by a public sector drag of 52% GDP. That's why borrowing is so high, we're still borrowing, just not as much is hardly good news to the productive taxpayers who still have to pay it back.

£2.5bn support for small business to boost skills and innovation
One year business rate cut from October to help 500,000 companies
Investment allowance for small firms doubled to £100,000
Doubling relief on capital gains tax for entrepreneurs
No change to capital gains tax rates
£385m to maintain road network
Nowhere near enough.

One-off bank bonus tax has raised £2bn, double the amount forecast
Backs tax on bank transactions but on global basis
Basic bank account guaranteed for a million extra people
RBS and Lloyds Bank Group to provide £94bn in small business loans
New service to adjudicate credit disputes 
Yes it's a bonus tax, but guess where the banks will claw it back? That's right, increased bank charges for you and I. Also forcing the state banks to lend might not be such a good idea, they don't exactly have a great track record there.

Six month work or training guarantee for under 24s extended to 2012
Amount of time over-65s have to work to receive work credits reduced 
Promises, promises always promises, some will always slip through the net and it's likely to just be a paper shuffling exercise.

Tax allowances for those earning over £100,000 gradually removed
No changes to VAT or income tax planned
Inheritance tax threshold frozen for four years
Clampdown on tax avoidance to raise £500m
New tax agreements with Belize, Grenada and Dominica 
Robbing the rich as ever for Labour, just means the harder you squeeze the more likely they are to bugger off and no longer invest or spend here.

On track to achieve £11bn efficiency savings target
Reform of housing benefit to save £250m
15,000 civil servants to be relocated outside London 
Fair enough, but still small potatoes for what's a massive overspend.

£2bn investment bank to back low-carbon industries 
Wasting our money on schemes that aren't neccesary or workable.

Funding for 20,000 new university places in science and maths
£35m enterprise fund to help university-launched businesses 
Only took you 13 years to realise we need hard science as opposed to degrees in flower arranging?

Winter fuel allowance rates extended for further year

I suspect the real budget (as opposed to this electioneering budget) in June/July will really hit hard. No tax cuts (no surprise there) to help out industry and the real wealth generators of the country. Usual sop to green environmentalism despite all the evidence it doesn't work and isn't necessary.
The big surprise is that this is actually a fairly conservative budget (conservative as in a small c) no massive giveaways, no spend like there's no tomorrow. I suspect this is an Alistair Darling budget not a Gordon Brown one.

1 annotations:

I am Stan said...

Yo Quiet man,yeah, it could av been worse,I agree sounds like a Darling budget not a Gorgon one!

Still a mess though eh!.