The Budget

Citizen J

Novice Member
What a missed opportunity. The government will not make CB means tested as it is too "complicated" to do so?!?! Instead there will be a CB freeze for the next two years?

Looks like 98.2% of people will continue claiming it then :thumbsdow :thumbsdow

Edit - it is in fact a freeze for three years
 
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gavan

Novice Member
We may have to cut these public sector jobs to balance the finances, I've no confidence though the private sector will create the jobs necessary to fill the void. I think it's a con personally at a time when we need all the money we can get to cut corporation tax, that's just my opinion though and only history will show who's called this one correctly. I'm certainly not confident enough to disagree with what LGS & Sharger are suggesting completely.

There is no easy way out that sets us up for the longer term without shorter term pain. Yet the general public seem to think that there is some sort of magic bullet solution that will do this. This is probably not entirely unrelated to the fact that the majority of the public seem to be clueless about anything financial.

Yes, cuts will mean immediate pain. That's what happens when you are left in a situation where a government ratchets the debt up in the boom times leaving nothing in the cupboard for a rainy day - and then a whopping monsoon hits.

There's no way around it - attempting to keep borrowing and spending money to defer the crunch only means that somewhere down the line the cuts would be forced upon us and would have to be even bigger.

Thank goodness Labour weren't allowed to keep up the economic plate-spinning any longer and that we have a government willing to take action, however unpalatable that action is.
 

Citizen J

Novice Member
There needs to be more info on the framework of the new Capital gains tax. The government has raised it to 28% but details are scarce at the moment.
 

Urien Rheged

Distinguished Member
The Chancellor called this historic Budget "unavoidable," and announced the following measures:

Deficit and debt:

Deficit in balance in by 2014/15

Parliament to ensure debt falls as a share of GDP by 2014/15

Budget deficit to be £149bn in 2010/11

Budget deficit to be £116bn in 2011/12

Net debt to be 62pc of GDP in 2010/11

Net debt to peak at 70pc of GDP in 2013/14

Debt interest payments to cost £250bn by 2015

Tax:

VAT rises to 20pc from 17.5pc from January 2011

Food, children's clothing and other VAT-free items remain exempt from VAT for current Parliament

Capital gains tax to rise for higher-rate taxpayers to 28pc from midnight

Capital gains tax to remain at 18pc for basic-rate taxpayers

CGT exempt amount remains at £10,100 this year

Sin taxes:

No new increase on alcohol, tobacco or fuel

Planned increase in cider duty to 10pc above inflation scrapped from end of June

Spending:

Government spending will be £637bn in 2010/11

Government spending will be £711bn in 2015/16

Growth:

UK economy to grow by 1.2pc in 2010

UK economy to grow by 2.3pc in 2011

UK economy to grow by 2.8pc in 2012

Unemployment:

Unemployemnt to peak at 8.1pc in 2010/11

Unemployment to fall each year to 6.1pc in 2015

Public sector cuts and benefit reform:

Two year pay freeze for public sector workers (for those on over £21K)

The Government will accelerate the increase in state pension age to 66

Child benefit to be frozen for next three years

Child benefit removed from families on an income of more than £40,000

Benefits to rise in line with consumer prices

Tax credits reduced for families earning mroe than £40,000

Housing benefit restricted to maximum £400 a week

Medical assessment for Disability Living Allowance from 2013 for new and existing claimants

Business:

Corporation tax cut to 27pc next year

Corporation tax cut by 1pc point a year for next three years to 24pc

Small companies tax rate cut to 20pc

Tax relief for video games industry scrapped

UK bank and building society levy from 2011

Levy also on UK operations of foreign banks

Smaller banks not liable for a levy

Banks levy expected to raise more than £2bn a year
 

pragmatic

Distinguished Member
God that harper woman is a loon.

Sounds like a decent budget, will have to wait for the small print.

"What ever they do we'll vote against it" nowt partisan about that :rolleyes:
 
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virtual22

Member
Crikey!!! Just how bad is Harriet Harman!! :eek: What a load of guff she's coming out with, someone needs to tell her it's it's what you say that counts, not how loudly you say it. :suicide:
 

kbfern

Distinguished Member
Well it sounds like a pretty good budget to me,pretty fair on most folks whilst targeting overspending in government departments and the scroungers on handouts who are dubious claimants.

The folks who genuinely can't work will be protected whilst those that can but don't will be required to contribute by getting a job (when they become available).
 

S Bibby

Novice Member
Thank goodness Labour weren't allowed to keep up the economic plate-spinning any longer and that we have a government willing to take action, however unpalatable that action is.
Prior to 2007 the deficit grew at a lower rate and for the most part remained under control (a peak in 2005 following Iraq). Borrowing increased from 2002 and so did revenue but it was no greater at any point than in 1997 with NI and wages taken in. If we are that concerned about credit then why shouldn't we follow the example of many other countries ie. the US and take fiscal action ahead of time? We saw what happened when Bush cut into the government and the result was the highest unemployment in recent history, now spending is an issue once again. This really isn't a strong budget since most of the important measures have been delayed.
 

Ed Selley

AVF Reviewer
Capital gains tax to rise for higher-rate taxpayers to 28pc from midnight

Capital gains tax to remain at 18pc for basic-rate taxpayers

CGT exempt amount remains at £10,100 this year
Is the "higher rate" the 50% or 40% bracket? That one matters!
 

S Bibby

Novice Member
I do't agree Bibby, but on the US unemployment you got any links on that, quite intersting
I don't know how they count the figures but it is currently around 10% - I believe that is roughly in line with ours if you take the true number of claimants. I don't believe any of the figures above, least of all those on the bailout.
 

dazza74

Novice Member
I'm glad they didn't bottle it on VAT and went to 20%. Seems resonable to me this budget.
 

gavan

Novice Member
I'm glad they didn't bottle it on VAT and went to 20%. Seems resonable to me this budget.
Not that pleased to see VAT go up as it will make almost everything more expensive and is never likely to be reversed but I guess they had to get money from somewhere and at least VAT is somewhat 'avoidable' on discretionary spending.

It was also almost a cert to be raised as no party would commit to not raising it pre-election. They all waffled about having 'no plans' in order to give themselves wiggle-room and enable them to heckle the winning party who would have to be the ones to raise it.
 

kav

Distinguished Member
I did not know this was the case, it was not immediately apparent during the budget that this was the scenario. Very good move IMO.
I don't think that's right (based on the BBC anyway). It says that child benefit will be frozen for three years and tax credits will be cut for families earning more than £40,000 next year.
 

Urien Rheged

Distinguished Member

Citizen J

Novice Member
I don't think that's right (based on the BBC anyway). It says that child benefit will be frozen for three years and tax credits will be cut for families earning more than £40,000 next year.
:(

The information was taken from the Telegraph. They appear to have removed that line now though, so presumably it was a mistake.
Rather sad, I had got my hopes up reading the article. Like Ian J I watched the budget live and didn't hear the part about £40,000 cap on CB - but I walked out the room a couple of time so I thought perhaps I missed it.

Missed opportunity by the government.
 
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Steven

Senior Moderator
Giveth and taketh. Personal allowance rises but 40% income tax band threshold lowered. Hmm

In many ways this budget is quite mellow and the Lib Dems cannot bleat on about a lowered than sought CGT rise. Do they realise how much undue influence they have gained with a mere 57 seats?
 

pragmatic

Distinguished Member
It was all about not screwing the poor over, and try to get the long term unemployed back into work, which would likely be those that benefit most from these measures (thus making working more attractive).

Another thing was the housing benefit, there are people/families who are claiming thousands of £'s a month in housing benefits particularly in areas of London, which might be bad enough in itself, but those families would have to earn 6 figure salary to stay in the house if their benefits were talking away (i.e. they got a job). If the family earned say £50k i.e. both parents went off to earn national average wage, they couldn't afford to stay there and would have to move.

This is a classic benefit trap, I applaud the national maximum housing benefit. A nice knock on effect will hopefully be cheaper rents all around as the Government induced price floor is removed stopping the "crowding out" for those that are in work who pay rent out of their own pocket.
 
Giveth and taketh. Personal allowance rises but 40% income tax band threshold lowered. Hmm

In many ways this budget is quite mellow and the Lib Dems cannot bleat on about a lowered than sought CGT rise. Do they realise how much undue influence they have gained with a mere 57 seats?
Are you sure the 40% income tax band threshold has been lowered? According to direct.gov it goes up by a full £1

All in all I think it is ok, although from my perspective they should just have scrapped child benefit all toghter, and I have two children myself...I just don't belief in being paid for having children...Such nonsense...
 

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