Many thanks to the Chancellor for kicking off with a reminder that this is the worst recession for 60 years. We all know it, we all feel it and we only think you’re going to remind us about it now if you’re going to make some bleak announcements!
Anyway. Here is a summary (as at 1pm) of what he’s announced so far. Always bear in mind that there’s always a lot buried away in the small print so what follows is just headline stuff:
Inflation will be 2% by next year
ISA limits will rise in line with inflation
The stamp duty threshold will rise from £125,000 to £250,000. However, I believe this is for first time buyers and the quid pro quo is that stamp duty on residential property over £1 million will rise to 5%
A guarantee that everyone will have a basic bank account
The bank bonus tax raised £2 billion rather than an initial prediction of £550 million. Tax on bank bonuses will pay for a £2.5 billion growth package
The Growth forecast is downgraded from 3.75% (in the Pre Budget report) to 3.25%
The 1p rise in national insurance and the 50p tax rate are confirmed
More to follow
Roger Lawrie wrote:
Tough measures need to be taken, but are they tough enough? Recognising this perhaps we should all consider what measures we can take to cut cost in other areas, energy use for example. See http://www.youtube.com/watch?v=6ycSc5mLgRM for another view. www.envitae.co.uk
Edward Rees wrote:
It’s now 2pm and we’ve had:
Some green stuff – with a more investment in offshore wind farms as part of a new green investment fund. There’s a new £35 billion fund to help universities “spin out entrepreneurial ideas.” No idea what that means(!) but it also seems that the universities are being required to make efficiency savings.
An announcement of a determination to crack down on tax evaders and avoiders. Belize will apparently be one of 3 countries with whom we’re going to sign a tax information agreement. Poor Lord Ashcroft!
Clearly, part of the £500 million the Chancellor says will be saved by going after tax evaders, will be used fund higher winter fuel payment for pensioners for another year.
Child tax credit is to rise by £4 per week.
That’s it – The Chancellor has sat down and David Cameron is on his feet.
Finally: I’ve missed this! but my colleague Andrew Oxenham says that IHT allowances will remain frozen for another 4 years. That, of course, assumes Gordon gets back in. Indeed, whoever wins the election in 6 weeks time, watch this space again – this was the “phoney budget” after all.
Edward Rees wrote:
It’s now 1.30pm and oh dear, it’s not getting much better. It makes you long for the days of a Lawson-style giveaway pre-election budget: “tuppence” off the income tax rate in 1987.
Those earning more that £100,000 per year can expect some allowances to be removed; No VAT announcement will be made (that’s my kind of announcement – an announcement about no announcement!). Duty on tobacco will increase by 1% today and by 2% each year in the future. Alcohol duty will rise by 2p above inflation from Sunday night. However, Cider is being singled out for special treatment. It is (apparently) under-taxed. Duty on Cider will rise by 10% from Sunday midnight. Strong ciders will face an even heavier duty increase.
Civil Servants in London will be reduced. I assume this is by redundancy and natural wastage rather than by extermination! This should produce £20 billion worth of savings.
Unemployed people in the “most expensive houses” will be barred from claiming housing benefit.
£94 billion of new business loans (nearly half to SMEs) will be provided by the state owned bank. Business rates to be cut for a year from October for small businesses. Double entrepreneurial relief for Capital Gains Tax (CGT)