Budget Day

At last – the waiting is over. I always think that not knowing is much worse than knowing. And now we know!

Yes – there are things in the Budget that will affect everyone to some extent – but at least it is everyone.

First in line for the pain are the bankers (with a new levy) and then there are those high earners who try to sneak extra for themselves by taking some of their earnings as shares or something that attracts Capital Gains tax at 18% rather than the 40% rate of income tax for higher earners. Capital Gains tax will rise to 28% which hopefully will stop such shenanigans.

The up side of the budget was the long awaited linking of pensions to earnings, the injection of £2billion to the child part of tax credits and the raising of the tax threshold taking 880,000 out of tax and putting about £200 back in low and middle income earners pockets. That is the first step on raising that tax threshold to £10,000. All these are very good for Haringey – as will be the freezing of Council Tax for two years!  And no extra duty on wine, beer and fuel!

But – the hard stuff was the freeze on public sector pay for two years (but the lowest paid – up to £21,000 per annum would not be frozen and would get a flat rate pay rise of £250 for each of those years) and the rise to 20% onVAT. Food and childrens’ clothes and all those items that are currently VAT exempt will remain exempt.

Welfare reform is now on the cards. The system will be reformed to help people into work rather than remain dependant on welfare.

Lots of detail still to come – but in broad terms – that’s the way we are going to fill the gaping hole in our finances and pay down the deficit.

We’ve been living beyond our means personally and the banks have been gambling and lost our money nationally. There was always going to be a day of reckoning – and I guess this is it.

Labour, in the form of their acting Leader, Harriet Harman, responded to the budget – but it was quite a worn out, nothing much to say and no new ideas sort of tired response.

For me – the protection of the most vulnerable was the most important part of this austerity budget. And at least the broadest shoulders are going to bear most of the financial burden.

0 thoughts on “Budget Day

  1. Thanks Julie P. Irritating because i happen to have a difference of opinion?? Sorry about that!

    I recognise that families on low incomes need support but i thought tax credits were only being abolished for people on over £40,000 per annum? Have I got that wrong?

    Will you not benefit at all from the increase in the personal tax allowance threshold and the freeze in council tax?

    Few things that are needed on a daily basis are VAT-able. Or am i wrong on that? Heating VAT rates stay at 5%. There’s no VAT on food, childrens clothes etc etc.

    Me and my partner currently have £60 to survive for the next fortnight. (after bills, rents, debt payments etc etc). So i do know what struggling is about.

    I am attempting to understand here….

  2. You may also be interested to know Julie P that the very same poll pointed to almost 60% support for what the coalition are doing.

    Judge Lynne and co over 5 years – not 5 minutes!

  3. @ Ashley

    I will neither benefit from personal tax allowance, nor council tax freeze. I live in rented accom with a 6% hike in rent kicking in next month.
    You will probably (yawn) say ‘get on your bike’ – why should I? My kid’s are in school, I’m not uprooting them- do my kids not deserve an equal opportunity??

    I have read through all the comments you have posted, you seem to want everyone to live in a shoe box at the end of the street.

    There’s VAT on a whole host of things, regardless of this, have you not heard of inflation? supermarkets putting up prices, TFL increasing tube travel? My youngest turning 6 which means he loses concessions etc etc.

    I know of no poll where there exists a 48% dissatisfaction and a 60% satisfaction score- do you want me to help you doing the maths?

    Glad to hear you’re happy surviving on £60 for the next fortnight- you sound like a turkey that’s voted for Xmas.

    Get your head out of your backside

  4. Lynne

    i can only speak personally of course but you use the term that ” We’ve been living beyond our means personally”- im sorry but i take offence at that label being being applied in a generic sense- the vast majority are NOT I Can assure you – Politicians who are not subject to the strictures that poorer paid people have to adhere to are the last in the queue to dole out moral lectures .

    So please feel free to correct your original entry and remember that people such as my wife and i – on one part time wage ( yes unemployment is heavy in this part of the North west) are still capable of acting with financial responsibilty

    and as for the Lib Dems supporting a VAT rise – no excuse so dont even try

  5. Julie p – we’d all be happy if the gvmt cut taxes and increased spending but this is the real world and difficult decisions have to budget made. I’m not going to tell you to get on your bike. Far from it! And that isn’t what is bring looked at either. People do find it hard getting work in some areas and uprooting is costly. Help with travel or with moving should be welcomed. I’m not happy living on 60 for the next two weeks at all. It’s a real struggle but under the current rules I and my partner get no help whatsoever and I’m sorry it makes me angry when I see people on 40k or more a year having hand outs of tax credits and universal child benefit when we and others who do really need a little support can’t get any. The balance has to be redressed. By the way I’ll debate with you but I will stop short of personal insults and I would hope that you would do the same. Having a difference of opinion is not a crime

  6. @ Ashley
    You sound like a record that’s stuck.
    Why presume I enjoy a collective salary of £40K – far from it.
    It is being said that people should ‘get on their bike’ – I heard Danny Alexander alude to it on the radio-Tebbit for the 21st Century- besides, you go on to say that ‘help with travel or moving should be welcomed’.
    Utter nonsense, and completely contradictory to the pieces you’ve wrote on this website with regards your stance on civil liberties.
    My civil liberty is to keep my kids educated where they are, and not be penalised for having them. Moving to another area would dent our income further as it would cost my partner more to travel to work.
    I don’t think you’ve considered the macro effects- you just sound like Mr. Angry with a simplistic ‘one size fits all’ approach

    Oh, and I don’t want handouts, never have.

  7. Sorry but no one has said get on yer bike and look for work. No one! That is factually incorrect. You are just listening to spin. I accept there are some policies the lib dems wouldn’t do if it was a pure lib dem gvmt but it’s not. It’s a coalition and therefore the libs have to accept some Tory policies will go forward. In the same way vat would probably have also risen under labour too. They’d have done unpopular things in a coalition too and no doubt the lib dems would have been the whipping boys then too. Why not shout and scream at the Tories rather than lynne who I am certain is fighting for you and others within gvmt. Unfortunately she won’t win all the arguements. That is coalition politics.

  8. Ashley
    You sound like some third rate 6th form pseudo-intellectual.
    If you pay attention, I said Alexander alluded to it.
    It must be obvious to you that ‘support to move’ is just a 21st century paraphrase of ‘get on your bike’.
    Don’t you think the underlying message is the same?

    I don’t listen to spin, I make my own decisions by being informed-always-independently.
    I think it’s rather you who’s been duped.
    If you can’t see that the LibDems have been used to make this budget more palletable then you’re more ignorant than you appear.

    I’m making a wild assumption that you don’t live down here and hence won’t have seen our MP’s campaigning diatribes over the year’s.
    It’s one thing compromising for the sake of an assumed collective good, another to endorse everything you’ve vehmenently campaigned against.
    You can’t tell the difference between coalition politics and hypocrisy.

    I’ve not voted Labour previously, but as an example, there were scores of Labour MP’s who resigned from the whip/being on-message over the Iraq War i.e. a principle.

  9. Ha ha…and the insults continue to fly. If you can’t have a sensible discussion then I don’t see why i should bother. I’ve been a Liberal for as long as I can remember and I happen to know the sincerity with which Lib Dems hold dear their principles including people like Lynne Featherstone and Danny Alexander. Not every Lib Dem agrees with the recent measures and i’m sure there will be a rebellion at some point and then you can give those Lib Dems who do rebel your support i’m sure. Political parties are broad churches. According to ALL the recent polls the vast majority of the public approve of both the coalition and the measures in the budget. Judge Lynne and others over 5 years not 5 minutes. They’ve done more to help the poor and poor pensioners etc in 6 weeks than Labour did in 13 years. A Labour Party that presided over the biggest gap between rich and poor ever!! If they get the pay threshold up to 10k before paying tax that will be a huge achievement. Linking pensions to earnings will also help millions of poor pensioners too. Yes they’ve had to bow to the Tories on other measures but that’s compromise. The Tories have 80pc of the MPs in the coalition. Quite simply the Lib Dems will not get all their way. I suppose you’d prefer them to have just forced another election?

    Anyway, no point talking with you really because you’ll only keep bashing about personal insults about someone you know nothing about and have never met.

  10. why don’t you investigate if you qualify for the extra money being given to the poorest families with children. £2bn being directed at poorest families in the way of tax credits. You might qualify?!

  11. What polls? Can you clarify your sources. They’re not the ones I’ve read (nor the Mori as played back by Radio 4 on Saturday).
    I don’t think that’s actually true, do you?

    ‘More to help the poor’- what, by taking away family credit? Could you please qualify this statement with fact?

    Have you read the other blog re: assessing incapacity? Do you think there’s an overwhelming sense of joy on that one?

    You keep missing the point.
    Consituents down here are complaining about an MP who vociferously campaigned against the Tory policies she is now so strongly supporting.

  12. Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?

    –Dwight David Eisenhower, “The Chance for Peace,” speech given to the American Society of Newspaper Editors, Apr. 16, 1953.

    “Save Money by Scrapping Trident.”I thought that was what the LibDems and more so Nick Clegg fought the election on.We pay America a lot for its weapons that we never use.

  13. Mal,

    I have asked Lynne several times on this blog and by letter also to confirm what she now believes regarding Trident. In her reply to my letter she said she would forward my enquiry to Liam Fox! I emailed back to emphasise that it his her views that I want to hear.

    This week will no doubt see many of the LibDems who were against greater autonomy for schools looking for a hiding place … or have they all been converted by Michael Gove ? If they have, and having listened to Gove on this mornings Radio 4 Today programme, I wonder what principles they ever had. And it seems that there is a curious imbalance in this coalition; Cameron can say long in advance that he will campaign against voting reform, and yet the LibDems appear afraid to make even the slightest comment about key Conservative policies – policies about which even some Conservatives are voicing criticism. But I suppose it would all be a lot worse if the LibDems weren’t in there working with the Cons …

  14. Dear Lynne,

    Following yesterday’s budget your leader (Dave) has said that the country needs to be making “things” again, and his deputy Nick says that the government, through its funding of the sciences(!) is promoting the invention, innovation and manufacture of “things”. Laudable as this sounds, can you please give us an indication of what these mysterious, unspecified “things” might be ?


  15. Carl

    The things are threadbare excuses – suppliers are working round the clock to fulfil the massive demand from Liberal Democrats.

  16. Apparently there’s also been a huge rush on pathetic excuses and broken promises.