Today Chancellor Alistair Darling cooly and expertly delivered a strong, sensible budget for the future – a budget designed to aid economic recovery and ensure that we don’t face the dreaded double-dip recession. Announcements included:
- Stamp Duty scrapped for homes below £250,000 for first-time buyers, but only for two years
- Stamp duty on residential property sales over £1m to increase to 5% from April 2011
A good Robin Hood-esque plan. Tax the rich more to aid the poor. A true Labour ‘the many not the few measure’. I can’t see anybody but a few millionaires getting red in the face about this one.
- £2.5bn package 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
All great news for UK industry and innovation, helping to promote stable economic recovery. I can’t see any reasons why anybody could possible complain over these measures.
- Six month work or training guarantee for under 24s extended to 2012
- Amount of time over-65s must work to receive work credits reduced
Good news for young and old alike. The young persons guarantee ensures that the young generation will not be left behind due to the recession, as a generation without work.
- Tax allowances for those on over £100,000 gradually removed. No changes to allowances for everyone else.
- Annual limits on Individual Savings Acounts (ISAs) will rise from £7,200 to £10,200 next month.
- 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
- £2bn investment bank to back low-carbon industries such as offshore wind. Government to provide £1bn through asset sales
A great step forward for the environment and new green technologies.
- Funding for 20,000 new university places in science and maths but institutions must make savings elsewhere
- £35m enterprise fund to help university-launched businesses
Again, investment that will help future green technologies and keep the UK competitive in terms of new and green technologies. Also a boost for entrepreneurs, innovation and industry.
- Winter fuel allowance rates extended for further year
- £4 rise in child tax credit for parents with young children from 2012
More help for the elderly and real help for families that benefits all children (as opposed to slinging money at married couples).
- Wine, beer and spirit duties to rise by 2% from midnight on Sunday and further 2% rise planned for two years from 2013
- Tobacco duty up 1% from midnight on Sunday and by 2% in real terms each year until 2014
- 3p fuel duty rise to be phased in in three stages between April and January 2011 rather than in one go next month
The usual. Anybody expecting anything else would have to be living in a dreamworld. The increases on alcohol and tobacco are fairly minimal, whilst the staggering of raising fuel duty means less complaining from motorists and an easier rise for consumers to deal with.
Other good points to come out of the Budget speech were:
- Borrowing this year forecast to be £167bn – £11bn lower than predicted in December
- Borrowing to fall from £163bn in 2010-11 to £74bn by 2014-15
- One-off bank bonus tax has raised £2bn, double the amount forecast
- Basic bank account guarantee for a million extra people
- RBS and Lloyds Bank Group to provide £94bn in small business loans
- Backs tax on bank transactions but on global basis
- New service to adjudicate credit disputes
This was always going to a be a good Budget. You’d have to be incredibly stupid or insane to present a highly negative Budget just 6 weeks before a General Election, however it does seem that the voting public have found one issue to complain vehemently about. Nothing to do with the economy, education, pensioners or business… cider.
Cider. The big issue.
- Cider duty to rise by 10% above inflation from midnight on Sunday
This is what people seem to be most angry about, so much so that it became a trending topic on twitter and my news feed has scrolled all afternoon with messages of anger and disgust. On cue a protest group has sprung up on Facebook. From this I have deduced that we either have a massive problem with secret cider addiction in this country or that people simply cannot find anything else in the Budget that they can form a legitimate argument against so they have gone for the easy option. Maybe it’s a mixture of the two…? Maybe it’s just that some people care more about how much a drink they like costs than the future of the UK economy?
Here are a few of the types of the measured and intellectual comments knocking around:
Hmm, maybe we should just forget about heating pensioners homes or extra investment in green technologies and let the cider drinkers carry on getting drunk on the cheap… it obviously means a lot to them.
I can understand why cider has been singled out – although it seems that other’s don’t (or maybe they do but are pretending not to because it aids their massive outrage). A lot of ciders are sold very, very cheaply even though they can be quite strong. Especially in supermarkets, corner-shops and markets, which makes it a very popular drink with under-age drinkers. To be honest myself included – you could get a bottle of White Lightning from Leeds Market for a £1 when I was 15 and many of us did, although I’d usually give mine away after a few mouthfuls because it’s bloody awful stuff. Other’s seemed immune to the taste and downed the huge bottles in one, often throwing up not long after. Groups of teenagers still surreptitiously hand round cheap bottles of White Lightning, Strongbow etc to each other, as their cheapest most effective way of achieving the drunken state they desire. Alcoholism, teen alcoholism and binge drinking are massive problems. They are a massive burden on the NHS and society – not to mention the problems they cause for individuals and families. Maybe people could look at this as a measure that may go some way, however small, to alleviating those problems and worry less about how much they are going to pay for a refreshing alcoholic (oxymoron) beverage during the summer (let’s face it Pimms is the better summer drink anyway).
Before anybody points it out I am well aware that cider is also sometimes consumed in moderation by sensible adults, some of whom are obviously outraged by this and seem to feel personally victimized. I think people are missing the big picture. This is alcohol, it is bad for you, it is a drug, this country drinks too much of it anyway. If you really just like the taste of cider and not the fact that it gets you intoxicated quickly and cheaply then you can buy sparkling apple juices and non-alcoholic ciders. It’s not like they’re increasing tax on orange juice or something good for you. A lot of ciders were dirt cheap, those are the ciders that this increase is designed to target, now the price will be more in-line with other alcoholic drinks. I think it is only small cider manufacturers who have the right to complain on this one.
Apart from the debacle over cider I’ve had a good Budget day and I think I’ve seen a mainly positive reaction to the main, important (non-booze) related points.
Just a note about presentation. I thought Darling delivered his Budget speech with aplomb. He was cool, collected and statesmanlike throughout. I thought Cameron responded like somebody who had just drunk a bottle of White Lightning and had fallen out with his best mate. He reddened, he shouted, he stomped and tantrumed. This is not the first time I have noted Cameron’s undignified responses and quick loss of composure. He is often quick to change his attitude and tone if he is faced with a question or situation he does not like and becomes very unpleasant. I would like to think that somebody who aspires to be Prime Minister could handle interviews and debates in a calm, dignified and diplomatic fashion. Not by going red faced, shouting and putting an ugly, intimidating tone into his voice. Losing your temper is not flattering at all.