BLOG: Gosling’s Grouse: thoughts on the Budget-lite
The Chancellor must have gone for at least 15 minutes before he succumbed to the now famous “we’re all in it together” refrain.
Given the ongoing debate over who pays tax, it was inevitable he would focus heavily on this. George Osborne is going to get £3bn from Swiss bank accounts over the next six years – something he first announced over a year ago.
But he backed away from a ‘mansion tax’ because he could see the potential for a ‘poll tax’ moment for this administration.
A mansion tax – an expression he did not use – would have meant a whole new rebanding for property values, not something a government wants in the middle of a recession.
Good news for property owners the country over, and while it might have raised a lot of new revenue, it would not have earned any more votes, and most likely would have seen a revolt similar to the poll tax debates of the Thatcher administration.
The top annual allowance rate is being cut from £50,000 to £40,000, something that had been trailed quite well, but he made the point that just taxing the rich actually produced less revenue for the Exchequer.
Certainly, good news is a rise in the annual ISA limit to £11,520, which replaces some of the appeal of pensions for higher earners.
Equally positive is a proposal for the inclusion of AIM shares and other ‘SME listed equities’ as part of the stocks and shares element of ISAs. Does that mean, in theory, shares in Venture Capital Trusts (VCTs) might be held in an ISA? That will no doubt be one of the areas up for discussion within the consultation. If that is the case, it might make VCTs even more attractive.
The Chancellor told us what we know – namely it is going to take longer for the deficit to come down, growth is virtually non existent, and unemployment will peak at 8.3%.
It is hard to see how the economy is making ‘progress,’ in Mr Osborne’s words. A bit of road upgrading on the A1 to the north will help the lorry drivers, and the A13 in Cornwall should help Mr Cameron on his annual holiday in Padstow. A longer Northern Line down to Battersea Power Station will be great news for the Malaysian consortium which has bought the old place and plans to spend £8bn developing it.
A bit more support for alternative energy sources will be good news for the EIS and VCT markets, as well as some of the energy funds, but more ‘fracking’ – the controversial way of tapping into shale gas in the UK – is not going to go down well.
All in all, a Budget with not many surprises – most of it was mentioned on the Andrew Marr Show last Sunday. A bit in infrastructure spending, taxing a few easy targets, getting rid of the proposed fuel duty rises, and a little bit more for ISAs. If this was Budget-lite, there is not much to look forward to in the spring when we get the full Budget.