BLOG: Gosling’s Grouse: thoughts on the Budget-lite

0
Written by:
12/12/2012
Budget-lite or Budget 2, either way the idea of effectively having two budgets a year has become an essential part of the economy.
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.

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2231388-shutterstock-75382006
Repossessions 32% higher in North

The property divide is widening, as the pace of repossession in the north of the country steps up.

Close