Budget 2013. Excitement waiting to happen.
So that was the 2013 Budget. Despite even George having to admit that his plan for economic growth hasn't really worked out, he is stubbornly sticking to his plan of action and yesterday unveiled a Budget of, well, not very much really.
The headline giveaways (particularly the front page tweeted by the London Evening Standard before George even stood up) are:
a 1p cut in beer duty
scrapping of the upcoming fuel duty rise
an increase in the personal allowance (tax-free amount) to £10,000- from April 2014
tax relief on (some of) your childcare costs
Not exactly thrilling stuff. The childcare announcement was actually made yesterday, and allows working parents who do not qualify for tax credits/Universal credit to get tax relief at 20% on up to £6,000 of childcare costs, per child, starting with children under 5, but will be extended to include costs for those up to age 12. The beer tax is probably a direct result of serious lobbying by the beer industry, but duty on wine, spirits and cigarettes has gone up by 2% over inflation. So far so good if you are a real ale drinker with children.
The news that the personal allowance will increase to £10,000 was described as a "coup" for the LibDems, the £10k allowance being their only discernable effect on the coalition Government's policies. Still, £10k from 2014/15 is hardly big news- the tax free amount goes up to £9,440 this April meaning the magic £10k is only a less than 6% increase. Given the amount automatically increases with inflation every year (in the absence of other legislation), that recent inflation measures have been as high as 5.2% and the fact that the last increase was over 16%, £10,000 from 2014/15 is decidedly non-news.
But there were other crumbs of interest. Two new mortgage schemes will offer those with a 5% deposit a Government backed loan to get them up to 20% (presumably so they can get a decent mortgage), with a guaranteed lending scheme for those without a deposit to try and force lender to lend them a single bean. Employer's National Insurance also features, with a £2,000 allowance for employers meaning they can "hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax," hopefully getting more people back to work. Corporation tax rates will fall quicker than previously advised, meaning that a tiny company with one employee with pay the same rate of corporation tax as big business from next year. This is to signify that Britain is open for business, not that Britain's business is wide open for entries from tax-dodging multinationals. After all, we are getting a General Anti-Avoidance Rule (GAAR) too.
But all in all, the Budget has been received as unexciting, unimaginative and probably ineffective. Let's just hope George knows what he's doing.
Still, this handy infographic compiled by the Guardian from HM Treasury data shows just who is proportionately paying the most- based on percentage change in income. It's mostly not well-off people. So perhaps everything is running to plan after all...