|contains:1 banana, 1 Kitkat, copy of the Beano and
some poorly thought out ideas on the economy
So Osbourne has given his budget and the world is still turning. Will it continue to turn after the 37p duty increase on a packet of fags goes through tonight? Probably. And that will be entirely to a freeze on alochol duty- get the G&T’s in!
I’ve blogged on several occasions about the possible effects of a poorly thought out proposals to scrap child benefit for higher rate tax payers. In the end the policy has been botched- they’ve upped the threshold to £50,000 from a single wage earner in the house. Between £50,000 and £60,000 the childbenefit will gradually decrease on a sliding scale. This is a lot higher than the 40% tax band but of course still means that a person could earn £50,000, have a spouse that was a stay at home parent and get no child benefit whilst their friends with a joint income of £99,998 (£49,999 each) would get the lot. It’s still completely unfair but is now completely unfair to fewer people. Is that a victory of sorts?
The tax-free personal allowance is going to rise by £1,100 from April 2013 to £9,205. This will make 24m people £220 a year better off (basically anyone who earns over the taxable threshold) and since it applies to higher rate tax payers as well, I assume it will make them £440 better off. I’ve not seen the details on this fully to be honest. [update] The basic rate limit will be cut from £34,370 to £32,245 in April 2013 anyway, which will more than negate the increase in the personal allowance for anyone in the 40% bracket. This will make a small difference to us, I say small because it’s spread over 12 months
The Chancellor has also refused to drop the planned fuel duty increase for later this year. This means that come August, we’ll see another 3.62p a litre on prices at the pumps, meaning that a typical 50-litre petrol refill will cost £1.81 more. Not much in itself but with people already restricting car travel because of the prohibitively expensive cost of running a car, will it be the straw that breaks the camels back? It’s making electric cars and small engined diesels look more and more appealing in my eye. With three kids under 5 years old, it’s just impractical for us to use public transport.
Some analysts are saying Osbournes talk about simplifying VAT will see companies using the opportunity to up prices at the tills but I think we’ll have to wait to see the details of this. At least exemptions for clothing, books, (non luxury) food and newspapers are still in place.
Finally 85% of councils have agreed to freeze council tax bills for the next year (beginning April 2013). Given the poor service we are already experiencing, both from local councils and county councils, I’m not entirely sure this is good news- the whole service will be run by volunteers before long, until they all vanish down one of the bottomless potholes that doesn’t seem to ever get fixed.
There you are then, my first thoughts on the budget. It’s nowhere near as bad as it could have been for families, but it could have been better, especially if you need your car for the school run or a decent commute to work.
What do you think?