The Budget - It Didn't Take Them Long, Did It?

[Thorpe Groyney]

So VAT is up to 20%.

Which is very much at odds with what they said here on 9 August 2009 on the Andrew Marr Show: http://news.bbc.co.uk/1/hi/8192095.stm

("The Tories have "absolutely no plans" to increase VAT to 20% if they win the next general election, shadow health secretary Andrew Lansley has insisted.

On the BBC's Andrew Marr Show, Mr Lansley rejected reports that the move was being "very actively considered".

He said "no such plan" existed and denied reports that "senior level discussions" were held to discuss it")


And what they said on 29 April 2010 here in the slightly pro-Conservative Daily Mail: http://www.dailymail.co.uk/news/election/article-1269677/Tories-secret-plot-raise-VAT-19-5-emergency-June-Budget.html

("The Conservatives have denied they plan to hike VAT if they win the election. A Tory spokesman described the claims as 'complete rubbish', adding: 'We have no plans to raise VAT.")


'Progressive' politics indeed.

 

[number11]

I suppose in mitigation they could argue they had no idea quite what a terrible state lamentable Darling and Brown had left things in.....

I'm not against people changing their mind if they are doing it for the right reasons and think the more important discussion is of the merits of this budget, not what he or she might have said last year.

 

[Thorpe Groyney]

Like Ron Martin then. Okay .....

 

[Vange Shrimper]

Labour left this country in a mess economically and the government had to sort it out.

I also thought IMHO the public sector to have a pay freeze for 2 years was ok as well if they got £21,000 or more. Everyone has to chip in in whatever way they can.

 

[Bob Cratchitt]

So VAT is up to 20%.

Which is very much at odds with what they said here on 9 August 2009 on the Andrew Marr Show: http://news.bbc.co.uk/1/hi/8192095.stm

("The Tories have "absolutely no plans" to increase VAT to 20% if they win the next general election, shadow health secretary Andrew Lansley has insisted.

On the BBC's Andrew Marr Show, Mr Lansley rejected reports that the move was being "very actively considered".

He said "no such plan" existed and denied reports that "senior level discussions" were held to discuss it")


And what they said on 29 April 2010 here in the slightly pro-Conservative Daily Mail: http://www.dailymail.co.uk/news/election/article-1269677/Tories-secret-plot-raise-VAT-19-5-emergency-June-Budget.html

("The Conservatives have denied they plan to hike VAT if they win the election. A Tory spokesman described the claims as 'complete rubbish', adding: 'We have no plans to raise VAT.")


'Progressive' politics indeed.

So where would you suggest they get the money gained by this move?

It is all well and good to focus on one thing without providing alternative plan.

 

[Thorpe Groyney]

I'm not hear to proffer solutions, I'm here to point out the same sort of hypocrisy the previous administration were accused of and to get people ragging off against each other again.

 

[Bob Cratchitt]

and to get people ragging off against each other again.

Fair enough, I like the cut of jib sir. :D

 

[number11]

Like Ron Martin then. Okay .....

You consider Ron Martin is changing his mind for the right reasons (and with the best of intentions)? Blimey.....


I just think we are in a very unique situation about which something needs to be done. There is no benefit looking back to what was said a year ago as situations change and in this instance appear worse than they thought. It's their current action that should be scrutinised.

 

[pickledseal]

I've got my expected pay freeze too...
I'd expect the NUT (not my union) to be preparing the battlelines!

 

[Vange Shrimper]

I've got my expected pay freeze too...
I'd expect the NUT (not my union) to be preparing the battlelines!

I expect all the unions to strike over this!

 

[canveyshrimper]

I really do not see what striking would achieve. As the former Chief Sec to the Treasury put it (jokingly or otherwise), there's no money, it's all spent. The country hasn't got a pot to **** in, the Public sector will finally have to draw their horns in and take the medicine those of us in the hard pressed Private sectors have been taking these past two years.

I understand that VAT does not rise until January 2010, and FWIW remains an "indirect" tax, if you buy something that's Vat-able you pay it. And VAT remains zero rated on food and children's clothes.

 

[Vange Shrimper]

I really do not see what striking would achieve. As the former Chief Sec to the Treasury put it (jokingly or otherwise), there's no money, it's all spent. The country hasn't got a pot to **** in, the Public sector will finally have to draw their horns in and take the medicine those of us in the hard pressed Private sectors have been taking these past two years.

I understand that VAT does not rise until January 2010, and FWIW remains an "indirect" tax, if you buy something that's Vat-able you pay it. And VAT remains zero rated on food and children's clothes.

They said on Radio 5 last night some frozen food is taxable but fresh food isnt. Dont know what to believe thesedays...

 

[canveyshrimper]

They said on Radio 5 last night some frozen food is taxable but fresh food isnt. Dont know what to believe thesedays...

As far as I am aware food is zero rated, unless you eat in a restaurant when VAT is applicable.

 

[Jedi Shrimper]

Before I start, I'd just like to point out i'm not claiming to know better ways of doing anything, I have little economic knowledge so welcome any views etc. I'm just pulling out 3 poiunts from the budget that are of particular concern to me.

VAT Rise
Ok so the government needs more cash, I get that. However surely a VAT rise will reduce what people spend, I work for a small business and can see this affecting their custom. Things have been tight and whilst we've been thankfully free of redundancies (touch wood) when people have left they've not been replaced and there's been no pay increases for nearly 2 years now. Meanwhile for the big boys who've continued to rake it in corporations tax is being cut.

Student Loans Company To Be Sold Off.
My worry is whoever buys the SLC will change the rules and start demanding more money at a time when I can't afford it.

Medical Assesments for DLA (Disability Living Allowance).
This affects me as someone who has a loved one who rely's on DLA. I agree that fraudulent claimants should be stopped, however it does concern me how these tests will be carried out and by whom. Will the criteria change? Will the person deciding be qualified to understand all forms of disability besides the obvious physical disabilities ie. mental health issues that prevent a person from living a normal life?
As a side issue here, I would think the assesments themselves will cost us alot, for example will regular GP's be expected to carry them out, thus increasing the need for more doctors or will there be a special department set up. Both ways will cost money.

 

[Hotman]

Personally I think it was a cracking budget. Perhaps the only thing I'd change is taxing child benefit - I agree that means testing it would be an absolute balls-ache.

The VAT rise is hardly unexpected, and by maintaining zero-rating it will protect lower-income families who spend a greater percentage of disposable income on food and books.

Pay freeze also seems fair to me, due to the protection at median income level.

@Drastic Sturgeon - the CT cut will also benefit SME's, and the NI initiatives will also help new startups.

Public Sector cuts - unfortunately, there has been bloated budgets under the Labour governance and these have rightly been trimmed back. Working to budgets rather than requirements is the key issue here, not "the bankers". I feel sorry for those who will lose their jobs, but they are jobs that weren't necessarily needed in the first place.

Bankers Levy - as expected

I also feel that abolishing "sure start" funds etc is a wise move, even though I'm of "child bearing" age.

One weak point is the CGT changes, I've already worked out a fully legitimate strategy to maintain CGT at 18% (which is hardly rocket science at all), and am getting the wheels in motion for my personal assets. PM if you want to know how, it's blindingly obvious!!

 

[Moridin]

More than likely the best we could have hoped for, the Liberal influence may have tempered the odious cutting Tories urges a little. It is what I would expect from Cameron, quite moderate, and will leave the pinstripe wearing red faced back benchers nice and outraged :D

The cap on Housing Benefit is an interesting one. I have long felt that Private landlords take advantage of the rates (the risk of taking on a HB tenant aside) since the change to Local Housing Allowance. It sets out the maximum the State will pay for a particularly sized family, so why not increase the Rent to match?

I do doubt though it will encourage Private rents to come down much, and will end up with an increase of numbers on the Social housing waiting lists and homeless applications.

I have often wondered why Local Authorities will pay £2000 a month in LHA to Private tenants, rather than invest properly in Social housing and pay £250 in benefits, as well as increasing the number of assets and the size of a very important safety net.

 

[Hotman]

Exactly Moridin, the housing benefit scam has helped boost the Buy-to-Let market, its no secret.

It was dead simple to chuck a LHA amount to the mortgage broker which was completely unrealistic.

Local authorities were even keen on renting from private landlords, for £50 more a month than I was earning on one place the authority were happy to sign a 3 year fully maintained lease.

 

[class]

Personally I think it was a cracking budget.

Ditto!!

And Drastic Surgeon, you say that a VAT increase will decrease what people spend. You're kind of correct, but the point is that the increase does not come into effect until 4th January. The ordinary consumer will now impulse/panic buy anything expensive such as cars, large TV's surround sounds in the coming months before the VAT increases, hence increasing consumer spending in the next 6 months.

 

[Moridin]

Exactly Moridin, the housing benefit scam has helped boost the Buy-to-Let market, its no secret.

It was dead simple to chuck a LHA amount to the mortgage broker which was completely unrealistic.

Local authorities were even keen on renting from private landlords, for £50 more a month than I was earning on one place the authority were happy to sign a 3 year fully maintained lease.

I genuinely find the part I highlighted shocking.

It really does highlight the lack of stock available for let, if there were adequate properties available this scamming would be less rife. I do wish spending in my sector could be better directed.

A waste of finance, but good for you though :) I do despair at my chosen career sometimes :D

 

[Hotman]

I genuinely find the part I highlighted shocking.

It really does highlight the lack of stock available for let, if there were adequate properties available this scamming would be less rife. I do wish spending in my sector could be better directed.

A waste of finance, but good for you though :) I do despair at my chosen career sometimes :D

Don't worry - I didn't take advantage of it (my tenant in that place has been great so far, and I don't break deals that I've agreed with people).