To be honest I was a bit underwhelmed by the budget, people said it was risky but I finished watching it and didn't really have too many points that I wanted to talk about!
"As a result of this Budget, someone working a full week on minimum wage will see their income tax bill cut by over 50% compared to under Labour.
Increasing the personal allowance to £9,205 takes us within touching distance of our number one manifesto pledge – ensuring no one pays any tax on the first £10,000 they earn.
Thanks to our changes, a basic rate taxpayer will be paying £45 a month less in tax than they would have been under Labour."
You can understand why, it's seen as the major Lib Dem "win". Announcing the largest increase in the personal allowance, taking it really close to our (arbitrary) target of £10,000, is a really good, positive move for most working people, taking even more people out of tax all together. It's also really expensive to do for a Chancellor so it is impressive that we've managed to get Gideon to agree to it...
The problem is it doesn't really look like we've had too much else back, not long ago there were claims that we would definitely not reduce the higher rate of tax from 50p to 40p or 45p in the pound, hell our conference even confirmed that, yet just a few weeks later we have. The problem here is tax avoidance wont definitely come back down as the tax rate does, it's sticky - people wont suddenly get morals. However they obviously believe that their new measures will bring in more money overall from the wealthiest, which is the important thing. This isn't thought the best political move, it allowed Ed (or Wallace - I'd rather they didn't get into childish name calling, they should be above that) to ignore the better things and focus on this as an ideological benefit to the rich. To be honest, even with the supposed overall increased take from the wealthy as lets face it not all of the wealthiest will be effected by the stamp duty or the anti-avoidance measures - lots will get a huge tax cut!
The child benefit change (will be tapered down once someone in the family hits £50k) is also not great as still a couple who both earn £49k will still get the benefit whilst a couple with one earner getting £60k will not. Now I know that this is difficult to administer and yes when benefits are universal it means those who need it are guaranteed to get it but to be frank, I don't see why a couple with earnings of £50k would need child benefit! That's a couple with above average take home and I wouldn't prioritise them as people to help.
One interesting change is the removal of the change in the personal allowance to those over 65. I guess you can only look at this as a whole, yes their allowance wont be increasing as much as expected, however at the same time they will be getting a greater amount of income.
The other good news in brief:
- Growth for 2012 revised up slightly (despite Labour claiming we're heading into another recession). It's bad to look at forecasts further than that - for evidence just check 2007's budget.
- Borrowing £1bn lower than predicted.
- Reduction in the corporation tax rate. This really will help millions of companies and is consistent with the policy of reducing the taxes on income in favour of wealth - which most Lib Dems are in favour of.
- As an accountant this isn't great news for my profession as it will lower some fees however it is good for very small businesses - they can now report their profits on a cash basis. I wouldn't surprised if most people missed this but it will make things a lot easier for those companies - I'm amazed how few people understand the accruals concept.
- Increased transparency with regards how the government spends "your" money - however I'd prefer they just asked the media to publish it as surely it'll cost HMRC to distribute it.
Apparently it was a revenue neutral budget and I agree with Nick:
"Of course, this is a Coalition Budget and we did not get our own way on everything. Conservative priorities are not ours."
However less so on the next sentence:
"But as on so many other issues, we have made sure that there is a real Liberal Democrat stamp on this Budget."
Overall, yes there were some good things, however I don't think the poorest will be best off, working people who don't get tax credits will be, the reasonably well off may be hurt a little, some well off will be hurt a lot, however some millionaires will be better off!