Category Archives: budget

NICked again!

Much has been said today about Hammond’s so called U-turn on changes to National Insurance. It is, of course, no such thing.

If you read Hammond’s open letter to MPs he says that increasing benefits for the self employed has to be matched by increased contributions. However, these benefits will not be explained in detail until later this year. What he actually doing is putting things in the right order. You can’t expect people to cough up extra unless they know what they’re getting for it!

He is pressing ahead with the abolition of Class 2 NI. Unsurprisingly nobody is objecting to that and it does mean that the self employed will now pay less – so the inequality between contributions and benefits is now even greater. If I was an employee, I’d be protesting about that bit of unfairness. It just goes to prove that you really can’t please all of the people all of the time…

At the end of the day, the government has listened to the reaction to the proposed changes and modified its approach. The opposition make much of this, saying the government is in disarray and chaos which is, of course, nonsense.

Personally I saw nothing wrong with the changes announced but they were badly explained. And at the end of the day a government that listens and responds to public opinion can’t be a bad thing can it?


It’s budgie day…

“My name’s George and everybody shits on me!”

Yes, it’s that time when the Chancellor gets his red pen out, slashes billions of benefits, gives tax breaks to the wealthy and screws anyone who drinks, drives or smokes. It’s budgie day!

Unfettered by the Limp Dumps – and let’s face it, who wouldn’t want to be? – it’s Osborne’s first budget as a majority government Chancellor, so what can we expect from him? Well, the much trumpeted leaks would suggest…

  • Increases in fuel duty. He thinks he can get away with this because fuel prices have fallen so we won’t notice when he puts them up, will we? 
  • Reducing the benefits cap from £26,000 to £23,000 in London and £20,000 elsewhere
  • Removing housing benefit from job seekers to encourage them to find work
  • Getting the BBC to fund the free TV licences for over 75’s
  • Increasing the basic tax allowance to £12,500 – but not immediately, of course
  • Increasing the higher rate tax threshold to £50,000 which, given the increase in average earnings, would seem reasonable
  • Changes to inheritance tax thresholds which will allow people to avoid paying so much tax on their already taxed assets just for the right to die!
  • Abolishing employers NI contributions for under 25s to encourage employers to tackle youth unemployment
And then there’s the old chestnuts to pay for it : 
  • A clampdown on tax evasion which apparently he has been doing anyway although I’ve seen no sign of it working yet
  • Revising the growth forecasts so that he can use fictional money to pay his bills
  • Selling off the Royal Mail and shares in the banks
  • Saving £13 billion in government departments – provided the civil service and the unions allow it of course!
  • Tinkering with the climate change levy and the bank levy
One thing is certain : whatever Osborne does the SNP will slag off the ‘fooking Toories’, Labour will join in, and the Socialist Workers will organise more protests and strikes.
The fact that most of this stuff was in the manifesto and that the voters elected them on the strength of it will carry no weight with such people, so expect much gnashing of teeth, picket lines and chucking of bricks at police officers. Democracy in action. Makes you proud to be British doesn’t it?
Still, there’s going to be a marine reserve around the Pitcairn Islands so it’s not all bad news. I’ve been to the Pitcairns, and they’re jolly nice…

The EU: It just gets worse and worse…

OK, I’ll admit that I’ve banged on a bit lately about that ridiculous demand from the Fourth Reich for even more of our dosh to piss down the big black hole that is the EU budget, but I have to admit until I dug a bit I didn’t realise just how much we’d already been ripped off for…

On Friday, the Office of National Statistics published figures which showed that since 2008 our payments to the Reich have quadrupled. Yes, quadrupled. Here’s the numbers :

2008 £2.7 billion
2009 £3.8 billion
2010 £7.2 billion
2011 £7.5 billion
2012 £8.5 billion
2013 £11.3 billion

And they also revealed that we have already paid an additional £2.7 billion in the last year on top of the £1.7 billion they are currently demanding.

Mathew Elliot of Business for Britain summed it up : “The cost of the EU to UK taxpayers continues to spiral out of control. We cannot continue to write bigger and bigger cheques to remain a member of an unreformed and uncompetitive European Union. Business is struggling under mounds of EU red tape and the UK is threatened by another potential Eurozone recession.”

Senior Tory backbencher Bill Cash said “We are paying for making the hard choices. It is totally unacceptable. It is the mad house that Jacques built!”

In summary, we do well when the rest of the Fourth Reich don’t and we pick up the bill for them.

It’s bullshit, and the sooner this country comes to its senses, the better…

It’s budget day…

This is a risky post in the early hours of Budget Day – predicting what will happen this afternoon and probably getting most of it wrong. Having said that, let’s have a go…

I’m betting that this budget will be a bit of a damp squib. OK, the usual tax hikes will take place on cigarettes and booze, but I doubt he’ll do much on petrol so I won’t bother to fill the car up on my way to the offie.

Don’t hold your breath waiting to see if there are any tax giveaways either. Don’t forget that the General Election is not until next year and – cynical me – I suspect that the Chancellor will be holding back tax breaks until 2015.

The hot potatoes this year? Well the 40% tax rate seems to be rearing it’s ugly head especially after Osborne was reported to have said that people liked paying higher rate tax because ‘it made them feel successful and aspirational’. This is total cock. Nobody likes paying tax. And it’s been made worse by a trick learnt from Gordon the Snot Gobbler – stealth taxes. Except that this lot call it ‘fiscal drag’.

What is happening is that the basic tax allowance is going up (a good things as it takes the lower paid out of tax) but the level at which you start to pay higher rate tax doesn’t keep pace. They are using the 40% band to pay for the lower rate band. That sounds fine until you think that you are now considered to be ‘wealthy’ at around £42,000. That’s ridiculous.

Another hot potato is property taxes. Average house prices are rising again at last. Unfortunately, an increasing number of buyers are being caught in the bandings of stamp duty. The basic band needs to be raised and the way it works needs to be changed. The rate you pay is based on the purchase value of the property but the rate applied is charged on the whole purchase price. It’s not incremental like income tax and it should be.

And what about the so called mansion tax? The Limp Dumps want to see houses over £2million being taxed annually at 1% of their value. It’s a bloody silly idea. For a start, who’s going to do the valuations and secondly, why should you pay an annual tax just to live in your house? Whack it on stamp duty by all means, but let’s not get silly. It’s unworkable and I suspect the Limp Dumps know it will never happen but it’s a good way of distancing yourself from the wicked Tories when there’s an election coming soon.

What I’d like to see today is a huge increase in the cash ISA allowances, an increase in the 40% threshold to keep pace with the basic rate allowances, and a change in stamp duty to help first time buyers.

I suspect what we’re actually going to get is steady as you go, don’t rock the boat, don’t put the recovery at risk which translates into ‘wait until next year because that’s when the pre-election giveaways will happen’.

5 years of low interest

As this weeks budget approaches, I am forced to reflect that this month also marks the fifth anniversary of record low Bank of England base rates.

Now I understand that the last shower of shit laughingly referred to as a ‘government’ left this country in the crapper. The spend, spend, spend philosophy of Gordon the Gobbler’s fiscal policy need drastic action to dig us out again and there are signs that this is, at last, starting to work and is reflected in the growth forecasts for the next few years.

Since 2010, the private sector has created 1.6 million new jobs and inflation appears to have been brought under control. The banks are looking somewhat less shaky and lending is starting to happen once more. House prices are recovering. All very encouraging.

I realise that money is tight and that low interest rates have helped young working families to stretch their money primarily by keeping their mortgage repayments low and leaving more money in their pockets to spend and help the economy. Also, business have been helped with the cost of borrowing for investment which has in turn created more jobs and so the cycle goes on around.

But during this time, the government has failed the older generation. We focus all the time on the plight of the youth unemployed whilst ignoring the fact that unemployment amongst the over 50s is growing at three times the rate as unemployment in the under 25s. It seems that both are equally important.

The same dichotomy occurs when we look at interest rates. Yes, it’s important to help young families with mortgages but by cutting the interest rates we penalise the elderly who rely on the interest on their savings to finance their retirement.

I retired ten years ago, admittedly at a fairly young age. I was self employed for over 20 years so I have no company pension fund to rely on and am not yet old enough to get the laughable pittance known as the ‘state pension’. I sold my house and bought a smaller on in a cheaper part of the country. The money I released was placed in various banks and financial institutions to generate an income.

When I retired, I could place money on one year fixed term deposit at around 6-7%. A year ago I was lucky to get 3% and since the government started its ‘funding for lending’ program and the banks don’t need my money I’m now lucky to get anywhere near 2%. In general terms this means that my income is now about 1 third of what to used to be.

Mark Carney said last week that he thought interest rates would most likely slowly rise to about 3% in around 3 years time. When this happens, there will no doubt be moans and bleats from all the borrowers out there and great shrieks of protest from the Limp Dumps and the Labour Party. Not a word will be said on behalf of the poor bloody pensioners.

I’m not advocating a ‘fuck the youngsters – I’m alright’ policy but I am saying that there are two sides to this coin. I’m prepared to accept that I earn a little less so they can save a little more, but there has to be balance and consideration for all parties concerned.

Politicians need to remember that it is the older generations that are most likely to go to the polls and if they don’t address this balancing act, it will come back and bite them…