The Budget

2 Responses to The Budget

1. Michael Orton says:

   March 22, 2013 at 5:49 pm

   Surely that is a bit drastic, Tim?

   After all, his objective this budget was to look like he is doing something while actually doing nothing. With the exception of this odd idea of throwing lots of money into the housing market, almost everything done has almost no effect at all.

   There was all this excitement about childcare vouchers, then fury that nothing happens until 2015. However, if you look at the current deal a working parent not earning in the 40% band can get £243 of vouchers, saving £48.60 in tax a month. Two parents would be £97.20 in tax, and the new deal is worth £100/month. Not a lot of difference!

   But under the current rules, if you earn enough to pay any tax at 40% then you can only put half the money in the scheme, which some would say saves you just as much tax. However, paying £1 of tax at 40% puts you in the smaller band and you do not save the same tax. Making it per child makes it a bigger deal, making it the same size no matter what tax you pay makes it much fairer. So it’s better, except that it no longer covers after school care for over 5s. Sigh, try again George.

   But the money for buying houses, sorry but this does seem to have a logic failure. If you increase the available funds chasing a scarce commodity then the price rises. The correct action here must be to increase employment where there is housing and increase housing (if practical) where there is employment. Is increasing housing in SE England practical? I don’t think we have enough drinking water in the area.

   In short, the budget is a missed opportunity, with more wrong than right.
2. Tim Hall says:

   March 22, 2013 at 6:00 pm

   If he really thinks what the economy needs is another housing bubble, then he’s learned nothing from history.