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The Budget - Instant Reaction

8th Jul 2015
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 In theory at least, George Osborne's second 2015 Budget should have been the most interesting and exciting since 1997.

As every reader will realise, this is the first time that a single party government has introduced its thoughts on the country's finances since Gordon Brown did so in 1997. 

No longer can the Chancellor of the Exchequer blame the Lib Dems for every bad policy but, as a corollary, he can also do exactly what he and his party want without the fetters of those wishy-washy lefty types who until a couple of months ago occupied so many offices around him at the Treasury. 

It may not be entirely coincidental but this is also the day on which London Underground workers decided to start a strike over working hours and pay. 

Mr O does not like to make things easy. He not only has no money to play with but to make the game more complicated, his leader invented metaphorical handcuffs by promising not to increase the rates of income tax, NIC or VAT for the duration of this Parliament. 

At the same time, the Government seems intent on cutting inheritance tax and corporation tax. 

Where then will we find the money that the country so desperately needs to balance the books? 

This is a Budget for working people. So said the Chancellor in his introduction but it wasn’t too apparent thereafter. 

There is an attack on poorer students, which seems a little cynical and might make them into working people. Calling a loan in place of a grant “support” is also a fresh use of the language. 

On the tax front, there was very little new and changes for very long-term non-doms for example are much milder than might have been the case. This could be an area that is revisited in the future though. 

There is a swathe of measures to cut £12bn from those on benefits. 

That is not the whole story, since as Boris Johnson pointed out, apparently seriously, while the poor are having their benefits cut, it would still be possible to reduce the highest rate of income tax for the very richest in society. Even in the knowledge that the London mayor might be the next leader of his party, Mr Osborne bravely resisted such a proposal, at least this time. 

On the plus side, the long term goal is for the income tax threshold is increasing to £12,500 and the 40% rate to £50,000 but oh so slowly. 

The £1m IHT exemption sounds good for the wealthy at least, depending on how it operates. One problem is that this is being paid for out of pension tax relief, which will hit many who are already struggling to provide for retirement. 

On the corporate front, the increase in the AIA to £200,000 will be of benefit to some smaller players anyway and is definitely welcome. Add in a reduction in the CT rate to 18% and you can see why benefits have had to be cut so far. Maybe at these rates, even the large multinationals might deign to pay it? 

A new attack on dividends is a very clever way to address the abuses (if they are) of personal service companies. 

Mr Osborne also seems to subscribe to the good old Chinese diktat of restricting the numbers of children that the poor are allowed. 

All things are relative and by recent standards, this is an exciting Budget but even so most of us will be looking for something genuinely thrilling hidden in the small print. 

Somehow, none of this seems quite so bad when you can write about the event while plugged in to gloriously perfect music on the amazing new AK Jr, reviewed last week. 

It is capable of blocking out all of those irritating open plan interruptions but sadly not hasn’t the power to silence the Chancellor or Leader of the Opposition when they stand at the despatch box.

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Replies (8)

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By listerramjet
09th Jul 2015 10:36

poor students

an education should make them rich beyond dreams!  Its a grown up choice to become an undergraduate - good that the financial consequences are now more up front.

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By JC
09th Jul 2015 12:43

Always a tricky topic ...

'.. Mr Osborne also seems to subscribe to the good old Chinese diktat of restricting the numbers of children that the poor are allowed ..'

There have been numerous articles in National Geographic & other publications on third world birth rates and the link to mortality in those countries – whereas in ‘first’ world countries birth rates are generally falling except in certain sectors of the population

These high birth rate sectors in the indigenous UK population are in many cases generally identified as being those areas supported by the state – whereas in other areas birth rate is often dictated by means and adjusted accordingly

When people from third world countries migrate to 'first' world countries, where mortality rates are low, it generally takes 2-3 generations for the birth rate to fall into line with the lower infant mortality rates – although in the interim a higher birth rate prevails which in turn places pressure all round on the available infrastructure

Clearly not a message that anyone wants to hear and also a very tricky one to put forward without a ‘firestorm’ of criticism

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By slipknot08
10th Jul 2015 15:39

well, I'm happy to pitch in...

All the Chancellor said was that non-working people should face the same choices about whether to have children as working people, so the state will only pay for 2 of them. Well, bloody well done.

(a) the planet is seriously overpopulated and those who breed indiscriminately (including the utter nutter 'quiverful' types) are driving us further and further down the rabbit hole to destruction

(b) as a 'worker' I seriously resent paying for people to sit on their behinds all day and have as many kids as they want - one of the reasons I didn't have children when I might have been able to in my 20s is that I knew I wasn't earning enough to support a child. Pretty much the same reason I didn't get my beloved hounds (WAY better than kids) 'til much later on.

 

OK, hit me with your best shots - I SO don't care :-)

 

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By ShirleyM
10th Jul 2015 17:49

Hounds are great

Here is our newly adopted hound, a Saluki cross. He came to live with us on Thursday as a pal for Aunt Sally (our lurcher):)

http://www.ponderosa-kennels.org.uk/dog%20pics/Worzel.jpg

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By slipknot08
13th Jul 2015 08:30

He is gorgeous...

... I hope he's settling in well in his forever home - what a sweetheart. We've got 2 terminally spoilt flatcoated retrievers - Sidney, 7 and Samwise, 8 months. They are the light of my life.

:-)

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By ShirleyM
13th Jul 2015 09:52

Thanks, slipknot

He's settling in really well, and Sally has accepted him. Sally (whippet cross border collie) is very energetic, but they have a great time racing around our large garden. It's good for them both to have someone to play with. The speed they go at, and the way they can twist and turn is amazing to watch.

Fortunately, they are both very good with our last remaining cat. I can't believe how lucky we are to have two sight hounds that are friendly with cats.

ps. Flatcoats are great dogs. Have you had them since they were puppies?

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By slipknot08
14th Jul 2015 09:55

<3 flatties

Hi Shirley, yes we have: after we lost my darling old boy (Stanley-bear) last March, I signed up with a couple of flattie rescues, but second hand flatcoats are few and far between (which is a good thing) and none were available - poor little Sid was really depressed without his big brother, and eventually we decided to get another pup. Sammy is just a little delight (yes, even though we're down one stair carpet and 2 holes in the lounge carpet)... I love all dogs (pretty much anything with paws, whiskers, fur and tails actually) but flatties are extra special goofballs :-)

https://www.facebook.com/photo.php?fbid=918036494924126&set=a.8127619821...

 

 

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By ShirleyM
15th Jul 2015 07:56

None for rescue?

That is good to hear.

Your woofer is gorgeous. You are very lucky to have two wonderful dogs, and we are too. :)

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