Budget

[Grand Moff Muffin]

news.bbc.co.uk/1/hi/politics/10374475.stm

Any thoughts?

Martin

[legios]

The Housing Benefit changes worry me a bit, not personally but in terms of their potential impact on the client group I deal with.

They do strongly have the potential to exacerbate the problems of some people who are in social rented housing, given the fact that this group tend to have fewer opportunities for mobility than other groups. A lot of those who are now, for whatever reason, in properties that the government define as too large for them my not have much option but to sit and take the fact that more of their limited benefit income is now going to be going on rent.

The new ceilings on HB amounts won't necessarily have a positive effect on tenancy sustainability for some Private Sector tenants either. I'm sure that the government hopes that these will act as a brake to restrict rent levels in the Private Rented sector but I am leery that this will actually happen.

As to a lot of the other changes, they feel like the sort of tinkering that I don't have enough understanding of economic theory to really fathom - reducing X but increasing Y, where I am not entirely sure how the various factors interact.

The VAT hike will certainly affect some of my purchasing decisions though, after all if things cost more I will almost certainly end up buying less of them.

(EDIT - some interesting analysis over on The Register (mostly an IT resource but sometimes quite good for other stuff)

www.theregister.co.uk/2010/06/22/budget/

The author identifies this as a structural change to the way our tax system works and in what it targets. Something I had missed completely. See, told you I didn't know much about economics.)

Karl

[dyrl]

As an outside observer:

1. Very nice informative over-view of something as complicated as the Budget! Good job BBC!

2. For me - the most important news is that spending is cut by 77%. This offsets the potentially negative effects of taxes going up in some areas.

A bit unfair, I think, that Corporate Taxes are falling while VAT taxes are going up - but I understand the rationale: VAT taxes are - from the point of view of the government - the easiest to collect, while high Corporate Taxes only mean that more business will go abroad.

The 20% VAT will still mean the UK will be fairly competitive on the European market anyways...

Also - the various measures cutting welfare or limiting welfare benefits sound good to me.

Certainly not my ideal budget judging by the overview - but looks like everything is going in the right direction. No massive new spending plans.

And most importantly - spending cuts. Conservatives have often made a mess of things by lowering taxes while raising spending. This is not good policy. And bringing the public debt down requires austerity on both taxes and spending.

So... while I am normally not in favor of taxes going up - I would support tax increases if they went hand in hand with spending cuts meant to bring the budget into balance.

Overall looks good to me!

Pete

[The Doctor]

Not a big fan of the housing benefit changes. Kicks people while they're down.

-Ralph