Thoughts on The UK Budget 2014?

[radiocaroline]

For those like me who aren't the most educated of economists, I decided to start a thread to look at the new budget, announced today by Chancellor George Osborne.

Annoyingly, the news channels all seem to be quite positive and I think for the sake of the many we need to further understand the implications of these policies to the masses.

It altogether seems mostly a populist attempt to get a broad spectrum of society on the side of the Conservatives ready for the General Elections next year, as well as delivering "good news" to the Scottish to try and eliminate the independence campaigns growing support.

A budget claiming to be for the hardworking is one which needs to be analysed.

What's everyone's thoughts on the new budget and its implications on the British proletariat?

I have posted the key points below for reference.


Opening remarks
• Osborne says the economy is continuing to recover and recovering faster than forecast. "Together with the British people we held our nerve"
• However, the job is far from done, our country still borrows too much, we still don't invest, save or export enough. This is a budget for delivering a resilient economy, for the "makers, doers and savers".
• Osborne says "In this budget we make sure hardworking people keep more of what they earn and what they save. Support for savers is at the centre of this budget".
Growth upgraded
• Growth estimates for 2014 have been upgraded from 1.8pc a year ago, and 2.4pc in December to 2.7pc. Biggest upward revision to growth between budgets for at least 30 years
• Office for Budget Responsibility predicts 2.3pc growth in 2015, 2.6pc in 2017 and 2018, and 2.5pc in 2018.
Public Finances
• 2014-15's deficit forecasts cut from 6.8pc to 6.6pc of GDP.
• In the following years it will be 5.5pc, then 4.2pc, 2.4pc, and will reach 0.8pc in 2017-18. The OBR predicts a 0.2pc surplus in 2018-19.
• Lower borrowing will mean each household saving £2,000 in lower debt interest payments.
Bank of England
• Bank of England's remit to keep inflation at 2pc renewed
• But the Bank has been asked to be "particularly vigilant" around the housing market.
Welfare
• A vote on capping welfare spending at £119bn in 2015-16, rising in line with inflation, will be held next week. Excludes state pension and unemployment benefit.
Taxes
• The personal allowance will be raised from £10,000 to £10,500
• 40p income tax threshold to rise from £41,450 to £41,865 in April, and another 1pc to £42,285.
• Those accused of using a tax avoidance scheme and appealing will have to pay tax up front while they appeal, rather than after. This will bring forward £4bn in receipts.
• Duty on bingo will be cut to 10pc, and the duty on fixed odds betting terminals will be raised to 25pc
• 2pc above inflation tax rise on tobacco will continue in next parliament.
• Alcohol duty will rise in line with inflation, apart from scotch whisky and ordinary cider, duty on which has been frozen.
• Beer duty will be cut by another 1p
Savers and pensions
• The tax-free limit for ISAs has been increased to £15,000, with stocks and shares allowances merged.

• Pensioners will not have to buy an annuity and will be able to draw down as little or as much, with tax restrictions on access to pension pots removed.
• 10p rate for savers abolished
Property and infrastructure
• From midnight tonight, properties bought for more than £500,000 through "corporate envelopes" will be liable for 15pc stamp duty.
• Help to Buy Scheme extended until 2020
• New garden city to be built at Ebbsfleet, the first for 100 years, building 15,000 homes
• £140m extra for flood defence repairs
For businesses
• Investment allowances for businesses doubled to £500,000 and extended to the end of 2015 at a £2bn cost.
• Export finance doubled to £3bn and interest rates on lending scheme cut by a third
• The Government will create an Alan Turing institute for research into Big Data
Energy
• The carbon price floor will be capped as part of a £7bn package to save manufacturers from increasing energy costs
Transport
• A fuel duty rise due in September has been scrapped
• Air passenger duty reformed: All long haul flights will carry the same tax rate as current visits to the US
• A £200m pot for councils to repair pot holes
Jobs
• Under-21s taken out of employers' national insurance contributions

[Vladimir Innit Lenin]

It's an absolutely shameless attempt at trying to buy votes from broad sections of the electorate.

The pretty sad thing is that if you ignore this is a Tory budget, it reads completely the same as a Labour budget. They are one and the same.

It's a good budget in the sense that in theory it will make many poorer people better off, but let's be honest here you can ignore the macro-economic indicator projections such as net debt, GDP etc., because they are always over-estimated.

Also, interestingly 3 economists from the Bank of England published a paper today which essentially refutes orthodox economics' theory of money, and endorses heterodox, alternative views.

Check it out: http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf

[radiocaroline]

It's an absolutely shameless attempt at trying to buy votes from broad sections of the electorate.

The pretty sad thing is that if you ignore this is a Tory budget, it reads completely the same as a Labour budget. They are one and the same.

It's a good budget in the sense that in theory it will make many poorer people better off, but let's be honest here you can ignore the macro-economic indicator projections such as net debt, GDP etc., because they are always over-estimated.

People are so fickle to look past it, and that's what I'm worried about, headlines of growth do wonders for a Conservative party on the campaign trail.

According to the Guardian, Ed Balls wants to implement more cuts!

Labour is just becoming as it was in the Thatcher years, scrambling to get a hold on the Tory votes by adopting Conservative policies, completely ignorant of the party's founding principles. Say goodbye to Labour credibility for the years to come.

[Vladimir Innit Lenin]

People are so fickle to look past it, and that's what I'm worried about, headlines of growth do wonders for a Conservative party on the campaign trail.

According to the Guardian, Ed Balls wants to implement more cuts!

Labour is just becoming as it was in the Thatcher years, scrambling to get a hold on the Tory votes by adopting Conservative policies, completely ignorant of the party's founding principles. Say goodbye to Labour credibility for the years to come.

I don't really think people are fickle to look past it. People's own household budgets have become so tight that £100 here or there makes such a difference; it's the old adage that people in poverty tend to be too busy (understandably) making ends meet to become politically conscious, unless there's some sort of tipping/snapping point.

[Xena Warrior Proletarian]

All over the news tonight was that it was focusing on 'savers and pensioners'

A grab at the increasingly UKIP friendly demography.

And let's not forget the pathetic token whiskey tax reduction (please Scotland we love you really, come back!

I live in Scotland. Mark my words it will be a Yes vote.

[human strike]

Fuck the new pound coin, I don't like change.

[radiocaroline]

fickle referring to the fact that people actually will fall for these populist policies and when the media is flying the Tory flags of a good budget, then it's obviously going to effect the electorate

[GiantMonkeyMan]

I checked with the BBC's budget calculator thing. I save 87p a year. Thanks Tory Party. Capitalism clearly works.

Frankly, you can't feed yourself on GDP increases, you can't pay rent with a reduced deficit and even if they're forecasting stable inflation it doesn't mean people aren't queuing up for food banks, falling into rent arrears, underemployed in shitty part time jobs or having to choose between heating and prescriptions.

[Ceallach_the_Witch]

I save £3.72 a year :0

that's enough to buy an extra ten-pack of bier d'or from tesco!

[Futility Personified]

I will be worse off by £5:51, sorry Rousing Chorus, looks like i'm gonna re-appropriate your stubbies :(

[GerrardWinstanley]

Lets say rising commodity prices didn't neuter the effect of that pathetic £500 rise in the personal allowance... It still means not a single worker in full-time wage slavery is considered poor enough to be taken out of income tax. In other words the government thinks a gross income £13,125pa is considered too much money for them.

It's national scandal... and don't expect the Labour Party (or even the large trade unions) to raise a peep of protest about it.