Home > Uncategorized > Budget 2012 analysis: The Good, The Bad and The Ugly

Budget 2012 analysis: The Good, The Bad and The Ugly

I know Osborne made the speech over a week ago now but I wanted to throw my two pence into the ring.

The Chancellor started his budget speech by saying that this budget will help Britain earn its way in the world, supports working families, backs business and is on the side of aspiration.

The Good

  • Raising of the tax allowance to £9,205 next April.
  • Scottish enterprise zones in Dundee, Irvine and Nigg
  • Exploration of enterprise loan (more needs to be done though)
  • Help for video games industry as well as Tv industry.
  • Taxing small business based on cash through their business rather than the complicated calculations of big business (more needs to be done to help SMEs though)

The Bad

  • £10bn cut in welfare in the next spending review.

The Ugly

  • More responsive pay rates to local area’s need i.e. regional pay
  • Tax allowance freeze for over 65s and over 75s
  • Merging of the personal allowances (also known as #grannytax)
  • Closing VAT anomalies (also known as #pastytax)
  • Capping of tax reliefs (aka Tycoon tax)

I actually agree with the idea of merging the personal allowances but its been done in a very ugly way hence the fury over #grannytax but I would urge all to read this piece by Patrick Collinson in the Guardian: Is the Granny Tax that unfair?

Regional pay is something I’m not sure where I stand on as I see there are good points on either side of the debate. Some good reading on this can be found here(against) and here(for).

I agree with closing VAT anomalies like the one Osborne picked out in his speech:

For example, at present, soft drinks and sports drinks are charged VAT; sports nutrition drinks are not.

The VAT anomaly over hot takeaway food in effect creates a new anomaly in the fact that if you buy the food cold, it is not VATable but if you buy the food hot it is VATable. What does it matter what temperature the food is? Surely the extra value in the food that makes it VATable is not the temperature of the food?

That leaves me with the last ugly thing on my list: the Tycoon Tax. I’m for this tax but it felt all of a sudden like we were back with a Labour government making policy on the hoof again. The first time we heard of the Tycoon Tax was in Nick Clegg’s speech 2 weeks before the budget.

The LibDems I think now we are in government need a better process of making policy. We need a policy-making process that is democratic, capable of producing long-term and short-term policies quite quickly because otherwise like Mark Pack says we’ll run out of ideas and need a long-time in opposition in order to build up a good arsenal of policies to take to the country again.

Overall though, I think the budget was a good budget. Maybe not as LibDem as I would like but considering we have 57MPs, its a good start.

Categories: Uncategorized
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: