The Budget

Discussion in 'Current Affairs' started by Merlin28, Jun 22, 2010.

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    VAT to go up to 20% from 04/01/11 but no rise in alcohol, tobacco or fuel duties.
     
  2. sgtpepperband

    sgtpepperband War Hero Moderator Book Reviewer

    Budget Key Points: At-a-glance

    Here are the key points of Chancellor George Osborne's first Budget, delivered on 22 June, 2010:

    TAX
    - The rate of VAT will rise from 17.5% to 20% from January 4, 2011.

    - Personal income tax allowance to be increased by £1,000 in April to £7,475 - worth £170 a year to basic rate taxpayers. It is expected that 880,000 of the lowest-paid will be taken out of income tax altogether.

    - Councils which propose low council tax increases will be offered extra funds to allow them to freeze the tax for one year from April 2011.

    - Capital Gains Tax remains at 18% for low and middle-income savers but from midnight, higher rate taxpayers will pay 28%.

    - The capital gains tax "entrepreneurs relief" rate of 10% on the first £2m of gains will be extended to the first £5m.

    - A "landline tax" to fund the rollout of fast broadband will be scrapped - instead the government will support private investment, partly funded by the digital switchover under-spend within the TV licence fee.

    CIGARETTES, ALCOHOL AND FUEL
    - No change this time round. Labour's plan to increase the duty on cider by 10% above inflation will be scrapped from July.

    BENEFITS
    - Child benefit will be frozen for the next three years.

    - Tax credits will be reduced for families earning over £40,000 next year.

    - Low income families will get more Child Tax Credit - the amount per child will rise by £150 above the rate of inflation next year.

    - New maximum limit of £400 a week will be applied to Housing Benefit, to save £1.8bn a year by the end of the Parliament.

    - Health in pregnancy grant to be abolished from April 2011, the Sure Start maternity grant will be restricted to the first child.

    - Lone parents will be expected to look for work when their youngest child goes to school.

    - From 2011 - except for the state pension and pension credit - benefits, tax credits and public service pensions will rise in line with the Consumer Price Index, rather than the, generally higher, Retail Price Index, saving over £6 billion a year by the end of the Parliament.

    - The government will introduce a medical assessment for Disability Living Allowance from 2013 for new and existing claimants.

    - The welfare shake-up will save £11bn by 2014/15.

    PUBLIC SECTOR PAY
    - Public sector workers face a two-year pay freeze, although 1.7 million of those earning less than £21,000 will get a flat pay-rise worth £250 in both years.

    PENSIONS
    - The basic state pension will be linked to earnings from April 2011, with the pension guaranteed to rise in line with earnings, prices or 2.5%, whichever is the greater.

    - The government will accelerate the increase in state pension age to 66.

    BUSINESS
    - From April 2011, the threshold at which employers start to pay National Insurance will rise by £21 per week, above indexation.

    - Corporation Tax will be cut next year to 27%, and by 1% annually for the next three years, until it reaches 24%.

    - The small companies' tax rate will be cut to 20%.

    - Tax relief for the video games industry will be scrapped.

    BANKS
    - A bank levy will be introduced, which will apply to the balance sheets of UK banks and building societies and the UK operations of foreign banks from January 2011. But smaller banks will not have to pay. It is expected to raise over £2bn a year.

    ENVIRONMENT
    - The government will "explore changes to the aviation tax system" such as switching from a per-passenger to a per-plane levy. It will consult on major changes.

    REGIONS
    - White Paper to be published on tackling regional economic differences in Britain later in the summer, followed by a paper on rebalancing the economy of Northern Ireland.

    - The upgrade of the Tyne and Wear Metro, extension of the Manchester Metrolink, redevelopment of Birmingham New Street station and improvements to the rail lines to Sheffield and between Liverpool and Leeds will go ahead.

    - A Regional Growth Fund will be created to help fund regional capital projects over two years.

    - People setting up new businesses outside London, the South East and the east of England will be exempt from £5,000 of National Insurance payments for the first 10 workers.

    UK ECONOMY
    - Growth forecast revised down from 2.6% to 2.3% in 2011.

    - The economy is predicted to grow by 1.2 % this year, 2.3% next year, 2.8% in 2012, 2.9% in 2013 and 2.7% in both 2014 and in 2015.

    - Debt to peak in 2013/14 at 70% of GDP.

    - Unemployment is forecast to peak this year at 8.1% and then fall for each of the next four years, to reach 6.1% in 2015.

    - Consumer price inflation is expected to reach 2.7% by the end of 2010 before "returning to target in the medium term". The inflation target remains at 2%, as measured by the Consumer Prices Index.

    - The UK is set to miss the previous government's "golden rule" - of borrowing only to invest over the economic cycle - in the current cycle by £485bn.

    BORROWING
    - Underlying current budget deficit should be "in balance" by 2015/16.

    - The balance of spending cuts vs tax rises would be 77% to 23%.

    - The measures are forecast to result in public sector net borrowing of £149bn this year, £116bn next year, £89bn in 2012-13 and £60bn in 2013-14.

    - By 2014-15 borrowing to reach £37bn, falling to £20bn in 2015-16.

    SPENDING
    - Mr Osborne said the state now accounted for "almost half" of all national income which was "completely unsustainable".

    - Average real terms budget cuts of 25% over four years - except for health and international aid. Departmental cuts amount to £17bn by 2014-15.

    - But current expenditure to rise from £637bn in 2010-11 to £711bn in 2015-16 - partly due to rising debt interest payments.

    - No further reductions in capital spending totals but there will be "careful choices" about how the money was spent. Projects with "a significant economic return to the country" would be prioritised.

    The complete Budget 2010 document can be read here: http://www.direct.gov.uk/prod_consu...[email protected][email protected]/documents/digitalasset/dg_188581.pdf
     
  3. The budget itself didn't strike me as too painful. It's the 25% off dept budgets that's going to be the thing that smarts, coupled with local council tax freezes I think it's not a good time to be a public sector employee.

    In fact I'd reckon if you were a public sector employee you could be an ex-employee in the not too distant future.
     
  4. Private and state pension, still paying 20% tax. In 2012 I'll be about 2% more worse off but it could be more. Round about now I'm thinking I got stuffed by investing in a private pension. They don't tell you the state pension is taxed also if you have more than about £9500 total annual income. At least they left the bus pass alone which is a gold card in London. You can use it on all transport. As far as council tax being frozen, it has been in most London boroughs for five or six years. Cider drinker so my pleasure goes up too, though ten pence off and two pence on. Most pub chains didn't put it up so nett loss for me. Wish I was a Walt. I could sell my VCs, GCs and DFCs. Course, if everone on Rum Ration sent me a tenner... :D
     
  5. Pay freeze I can deal with. Better than pay cut!
    VAT increase, no prob as I don't buy stuff other than essentials.
    Cider is a bonus but, pension.....now there's the issue for me.

    I transferred my RN preserved pension to my work pension and face have the gov rob me of that pension...

    **PLEASE LEAVE IT ALONE FOR 2 MORE YEARS**
    **PLEASE LEAVE IT ALONE FOR 2 MORE YEARS**
    **PLEASE LEAVE IT ALONE FOR 2 MORE YEARS**
    **PLEASE LEAVE IT ALONE FOR 2 MORE YEARS**
    **PLEASE LEAVE IT ALONE FOR 2 MORE YEARS**
     
  6. So does the budget have any effect on defence spending, or is that going to be left untill the SDSR?
     
  7. I mean have they cut defence spending or is that being left untill after the SDSR
     
  8. Errr well not true all three will be raised by 2.5% along with anything else that is covered by the VAT increase on the 4/1/11. He also has the option to increase the duty on all three in the August budget if he so chooses.
    Me I'm just like most of the turkeys still unwrapping Osborne's Christmas presents and mulling over his few kind words. After all "WE ARE ALL IN THIS TOGETHER" if you swallowed that line may I take this opportunity to wish you good luck with the Christmas fairy.One saving grace though is I can still blame Broon for the next how long ? :roll: ? :wink: :
     
  9. I will blame Broon until the UK financial position is back to where it was when Labour inherited it 13 years ago.
     

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