Budget offers more spending and more tax revenue

The Budget reshapes the financial story of the 2015-20 Parliament. Instead of planning a £60 billion a year increase in cash spending by 2019-20 the Budget lifts this to an extra £69 billion, similar to the increase over the last Parliament. Instead of keeping current public spending under very strict control in the middle years, this Budget increases 2016-17 spending by £15 billion and 2017-18 current spending by £25 billion compared to the March plans. The detail of which departments benefit will be given in the autumn.

So how is this all paid for? Revenues are now more buoyant, and the latest forecasts think this will continue. With no further increases in the main taxes the aim is to raise £168 billion more in tax in 2019-20 than the government collected in 2014-15. That is £11 billion more than forecast in March. The government still eliminates the deficit by 2019-20 on these estimates. The following year, 2020-21 is also shown for the first time. The plan is to have £40 billion of extra spending that year, paid for by a rise in tax receipts of £42 billion.

These augmented figures for spending mean the NHS and schools can receive the extra money they need, and the Defence budget is now offered increases to meet the NATO 2% of GDP commitment. The economic forecasts point to satisfactory growth for the next few years, with inflation and interest rates trending up a little but staying relatively low. Productivity is also shown rising.

The budget measures include more road investment, more apprenticeships, better education and training, a new national living wage, lower corporation tax rates and a new system of taxing dividends.

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71 Comments

  1. Cliff. Wokingham.
    Posted July 8, 2015 at 5:42 pm | Permalink

    I am pleased to see that Mr Osbourne has recognised that taxpayers have been funding business to keep pay levels artificially low however, I now fear that the so called living wage costs will be passed on and inflation will rise quickly and kill off any recovery…..Still I suppose that wilol inflate away the deficit.

    John: The owner of Yo1 Sushi ( I think that was hgow it was spelt) was interviewed on The BBc and described the budget as a socialist’s budget: Do you agree it is a socialist’s budget?

    • Monty
      Posted July 8, 2015 at 8:47 pm | Permalink

      I suspect that there will be two effects of this living wage threshold will be the loss of some jobs altogether, and inflation caused by the stacking up of pay differentials on top of the new unskilled baseline. So the low paid will ultimately be no better off. It’s analogous to a group of people spread out at various levels on a flight of stairs. You make the guys on the bottom step take two steps up, and everyone else does the same, and that’s entirely as it should be.

      An hour of a worker’s labour is worth what the customer is prepared to pay for the output of that labour. The customer is us, we are the ones who determine the worth of our lowest paid.
      Take as a baseline a medium skilled worker, doing 37 hours per week, and after tax and NI, able to support a modest home and small family. Should an unskilled worker be able to do the same? Why bother training and acquiring qualifications? So at the bottom rung of the ladder, there are only two real remedies. One, is for the government to stop burdening the lowest paid with tax, NI, and employers NI. The other is for the lowest paid to accept that they need to work more than 37 hours pw if they want the median paid lifestyle.

      Reply The official forecast says 60,000 jobs could be lost from the Living Wage

      • Hope
        Posted July 9, 2015 at 7:11 am | Permalink

        Public sector 1 percent pay rise for four years. MPs get another bonanza bumper pay rise increasing to £74,000 for a part-time job! We are all in this together, my foot.

        Clamp down on corruption, tax avoiders and everyone other than MPs. Now we have the cash for honours claims resurrecting and the Lords loaded with MPs involved in scandals and resignations. Why? There are enough honest decent people out in the real world that these institutions desprately need.

        When is Cameron going to clean up Westminster? When will the result of the cash for donors at Downing Street be revealed? Scandals started six weeks into the last parliament and continued with the Rifkind and Straw scandal weeks before the end. When is he going to act?

        Reply Electors choose MPs and have just chosen a new group

        • lifelogic
          Posted July 9, 2015 at 4:23 pm | Permalink

          The state sector is with pensions 50% over paid relative to the private sector so 1% is far too generous.

          • Hope
            Posted July 10, 2015 at 7:57 am | Permalink

            JR do not be ridiculous, this does not address the institutional corruption and substandard behavior in parliament. Nor Cameron’s overwhelming failure to address this promise he made. The public will vote from those available to them and most will not look up the record of those they vote for.

    • oldtimer
      Posted July 9, 2015 at 6:32 am | Permalink

      The Spectator say that six of the measures in this budget were lifted from Ed Miliband – so presumably he will be applauding these measures. Mr Osborne is also a Chancellor out of the Gordon Brown mould – much smoke and mirrors followed by a rabbit out of the hat at the end of the performance. Another characteristic is the habit of spending other people`s money for them – this is bad and is in danger of becoming ingrained in the budget process. A truly reforming Chancellor would not do this.

      I will be interested to discover if this adds to or deducts from the number of pages in the UK tax code – my initial suspicion is that it adds to them. That said the reduction in welfare spending is needed and welcome. Tax on dividends looks as though it will become even more complicated than it was before. IHT is also about to become even more complicated. Simplicity is a word that appears not to be recognised or understood when it comes to the UK tax system.

    • Lifelogic
      Posted July 9, 2015 at 12:07 pm | Permalink

      Of course it is a socialist, command economy, tax borrow and piss down the drain, government know best budget. Much of it came from Balls (and even the green party’s economics in relation to the buy to let thieving).

  2. Iain Gill
    Posted July 8, 2015 at 6:02 pm | Permalink

    You asked us for ideas you could put forward to the chancellor. How many of those made it into the budget?

  3. Lifelogic
    Posted July 8, 2015 at 6:03 pm | Permalink

    A socialist budget to its very core.

    Osborne thinks he is the best person to decided on company wage levels, rather than the market/employer/worker – a completely moronic way to destroy jobs. He has never even visited these employers how on earth can he know? A total failure to understand market economics.

    He also hugely fails to deliver on his IHT promise and yet claims he is “keeping his promise”. A complete & blatant lie that no one even bothers to take up at the lefty loon BBC. He promised a £1 million IHT threshold not this absurd pathetic and delayed half fudge.

    Huge tax increases and benefit reductions – on dividends, on the withdrawal of tax credits, on insurance premium tax, on pension relief restrictions, on dividend taxes, on road taxes and countless other areas.

    Nothing on the absurdly high 45% either. Yes another socialist faux Tory.

    His moves on Non Doms will be hugely counter productive too. His message to the rich and hard working is you are not welcome in the UK go somewhere else, they will do.

    And all these tax increases are just so he can continue to piss money down the drain on the bonkers green crap, the EU/PIGIS, the over bloated government, HS2, the dysfunctional NHS, second rate education/indocrination and huge government incompetence almost everywhere you care to look.

    More money for defence but will they spend it wisely for once – it seems unlikely.

    • Lifelogic
      Posted July 8, 2015 at 6:36 pm | Permalink

      I see Lord Patten (Cameron’s insane choice for a BBC trust chairman) has described John Whittingdale as an adolescent ideologue.

      http://www.telegraph.co.uk/news/bbc/11724775/John-Whittingdale-is-an-adolescent-ideologue-over-BBC-Lord-Patten-says.html

      Well perhaps better than a (some abuse left out ed) tax borrow and waste, pro EU/EURO/ERM, greencrap, faux Tory I suppose. Oxford University surely deserved far better.

      • Lifelogic
        Posted July 9, 2015 at 8:04 am | Permalink

        Well he started it.

    • Lifelogic
      Posted July 8, 2015 at 6:40 pm | Permalink

      A little better than Miliband/Balls/Labour/Harriet Harman.

      I suppose that is the best you can say for it.

      • Hope
        Posted July 8, 2015 at 8:20 pm | Permalink

        Overseas aid waste of£12 billion reinforced, insurance tax for cas and homes hiked, English students further punished to a lifetime of debt while E U students receive free tuition at some of our best universities, last week it was reported that £43 million will not be recovered from foreign student loans, EU contribution will increase for nothing in return, as tax intake increases more given away to overseas aid and EU! Free school meals for all migrant children, child care also provided for them. The list LL is endless. The pinnacle being JR’s and Osborne’s failure to highlight the deficit would be cleared by 2015 , Osborne now claims it will reduce at the same rate of the lasts parliament while the UK increases to £1.5 trillion! About five years longer than he promised. He ridiculed Brown, yet copies Labour plans. They think this is good news! More tax rises in addition to the 500 and more give aways of social housing at the expense of the taxpayer, why can they not save up like the rest of us?

        JR, a poor fudged reply to your question. When is Cameron going to let us know what he is negotiating. If anything?

      • Leslie Singleton
        Posted July 9, 2015 at 2:47 am | Permalink

        Dear Lifelogic–I agree and am in a state of shock that a newly mandated Conservative Government could jump on this latest Living Wage stuff and the unadulterated baloney about the country deserving a pay rise. It may very well be politically astute but I for one think it just plain wrong and would now be even less inclined than I was before, if that’s possible, to set up a new business and hire people in this country.

        • Jerry
          Posted July 9, 2015 at 6:35 am | Permalink

          @Leslie Singleton; Perhaps you need to ask yourself “could I live, in their circumstances, on what I pay my staff”, bearing in mind that often their needs will not be extravagant (unlike what some of the more right wing press might suggest).

          • Cliff. Wokingham
            Posted July 9, 2015 at 9:19 am | Permalink

            Jerry,

            Poverty is always comparative however, I do have a little sympathy for what you allude to.

            The real juxta position, in my opinion, is that less skilled people are less well off because they have to pay for the state. I have been to many places on cruises where locals live on a few dollars a day however, the state does not provide umpteen services for them nor employs half the population to oversee those services. Everyone, in the long run, would be better off with less state. The state never spends people’s money efficiently.

            We should not need the state to tell employers what to pay their staff. Gordon Brown started forcing others to pay for things and it looks as if Mr Osbourne will continue in the same vein. (TV License, New living wage etc)

            John,

            Is Mr Osbourne in the pro EU wing of the party because, it seems to me that, he is regionalising England by the back door?…..Far more sneaky than Lord Prescott’s democratic attempt at it!

          • Lifelogic
            Posted July 9, 2015 at 12:12 pm | Permalink

            Well you just need to with draw the tax credits they are what encourages low pay.

            Indeed and employers often have to or they just lose the customers to others who do pay the minimum. What is the point of paying more if the workers lose 95% of it in tax/NI and loss of benefits? The problem was created by save the world economic dope Gordon Brown.

          • libertarian
            Posted July 9, 2015 at 12:22 pm | Permalink

            Jerry

            I know you don’t have any idea about commerce but really you can’t keep showing us how little you understand.

            Wages are not arrived at on the basis of how nice they would be. They are arrived at by what they cost the business and how that impacts the pricing of products and services. You also haven’t bothered to think about the extra costs in terms of NI and pension costs that employers have to fund as well.

            Someone who banged on yesterday about advertising being a tax should really be consistent and you should be telling us that the new living wage REALLY is a tax on business and prices. In order to comply with the new wage levels prices will rise, the employer nor the worker will benefit the only people will be HMRC , so its a big fat extra tax.

            For the avoidance of doubt ALL of my employees are paid way in excess of £10 per hour except my 16-18 year old apprentices who are all paid at least £8 per hour

          • Jerry
            Posted July 9, 2015 at 5:43 pm | Permalink

            @libertarian; “I know you don’t have any idea about commerce but really you can’t keep showing us how little you understand.”

            Unlike you, I live in the real world…

            “They are arrived at by what they cost the business and how that impacts the pricing of products and services.”

            If the business can not pay their employed staff at least a minimum/living wage -so that other tax payers, other businesses, do not have to subsidies the cost of such employment via the benefits system- then something is very wrong with the business plan, perhaps the business is not ready to take on staff or that number of staff, perhaps the owner(s) are taking to much out of the business to soon.

            “Someone who banged on yesterday about advertising being a tax”

            Who was that, it most certainly wasn’t me, all I said is that the “customer pays”, if advertising costs are a tax then so to are the raw materials that the product is made from!

          • libertarian
            Posted July 9, 2015 at 7:44 pm | Permalink

            Jerry

            Thanks once again for providing proof that you don’t have a clue about business. Of course early stage businesses have very little scope, and struggle with dilemmas about when to employ. Of course there is a dilemma about whether the business can sustain staff in order to grow and make the business more viable. Thats the whole point Jerry, if you can’t afford staff you can’t grow the business. Er the business had a plan that used the baseline set by the government , they worked out their costs based on the prevailing conditions. The government just changed the parameters drastically which is why various official organisations are now predicting 60,000 job losses.

            Oh so you think that its just the wages that cost money then Jerry and you claim to live in the real world, what about job taxes? what about employment legislation and regulation overhead? Cheap shot about taking money out too early as I rarely find start up early stage business people taking salary let alone bleeding their own company dry luckily most of them aren’t a stupid as you. As for taxpayer subsidised wages how about if the government/public sector stopped taking it away in the first place, how about if they stopped wasting workers hard won money on vain glorious pork barrel projects like the BBC. How about if they removed the various taxes and levies that made the cost of living so high and energy so expensive.

            Oh dear oh dear you grade A hypocrite Jerry. YOU said that costs generated by a business and passed on to the customer via advertising on commercial TV is a POLL TAX thats what you said Jerry. So using your warped logic so is raising the minimum wage, yes or no Jerry, no more waffle or changing the goal posts is it a tax or not ?

          • Jerry
            Posted July 9, 2015 at 11:08 pm | Permalink

            @libertarian; You are entitled to your opinion. Oh and please quote what I actually said, not what you hoped I said.

          • libertarian
            Posted July 10, 2015 at 9:03 am | Permalink

            Oh dear Jerry you really do get yourself in an awful pickle don’t you, its what comes of not using facts or logic.

            Here’s your quote from the thread

            Jerry
            Posted July 7, 2015 at 7:15 pm | Permalink
            @Edward2; “And you think that is the same as the BBC licence fee?”

            No they are not the same, I am just pointing out that commercial TV is not free, what is more that cost is paid be those who choose to opt out of even owning a TV. Commercial TV really can be called a Poll Tax!

            So you see chap it WAS in FACT what you said oh and I notice you are STILL incapable of answering a direct question, which to remind you was. If as you assert a tax is something that causes a price increase to the consumer, is a rise to living wage a tax or not ? Simple question

        • Lifelogic
          Posted July 9, 2015 at 8:09 am | Permalink

          It may be politically astute in the short term (for a few months) but as it will clearly damage the economy, destroy jobs and reduce our ability to compete, it will not be good politics in the long term.

    • Iain Gill
      Posted July 8, 2015 at 6:47 pm | Permalink

      Its not inheritance tax that takes peoples house from them, its the selling their house to pay for their care in their last days… which will still be going on.

      The lazy so and so’s in the MOD will be laughing their socks off, I will probably be sitting in their canteen sometime soon listening to stories about their gold plated pensions and watching the sheer laziness of the civil servants. Same for NHS, Same for schools.

      • Hope
        Posted July 8, 2015 at 8:22 pm | Permalink

        NHS increase will not match the demand in immigration and free world use!

    • Lifelogic
      Posted July 8, 2015 at 8:08 pm | Permalink

      Another big Osborne lie is the idea that Landlords get an unfair advantage by getting tax relief on their interest (against rents). They just get taxed on their real profits like other businesses. If they pay interest to the bank this is deducted from profits (but is of course anyway taxable on the bank or the recipient of the interest). Is Osborne taking this numerically illiterate approach from the bonkers Green Party?

      When you start taxing people who are not even making a real profit the state is getting rather desperate – hardly “sustainable” as they like to put it Perhaps better just to call it what it is “legalised asset theft by the state”. The result is just higher rents and a reduced supply of properties to rent anyway.

      Similarly the result of enforced higher minimum wages will be fewer jobs, lower profits. uncompetitive industries and lower corporation tax receipts.

      Osborne’s whole approach is totally misguided. Lower rates and a simpler tax system are the way to go. This and stop pissing the cash down the drain on green crap, HS2 and endless other absurd waste & expenditure.

      • Hope
        Posted July 9, 2015 at 7:20 am | Permalink

        LL, PwC and Deloites have criticised this move on landlords. It is just another way of increasing tax to a group of people who will not be very ll supported. Highlight, a or tax rise.

        How many new taxes and tax rises since 2010 from Cameron who claims to be a low tax conservative. You simply cannot believe a word he says. The biggest broken promise being getting rid of the deficit by 2015. Brazenly Osborne speaks as if this was always his plan and will continue at the same pace. So the debt allowed to grow beyond £1.5 trillion. He has doubled the debt in five years what will it be like in another five? Deficit still about £90 billion. All on the presumption there will be growth? So what is the truth? Were we lied to at the last election and over the last five years or now?

      • Peter Parsons
        Posted July 9, 2015 at 9:59 am | Permalink

        Totally agree with you buy-to-let LL. The elephant in the room with this policy is the impact it will have on the dynamics of the privated rented sector. Larger landlords don’t bother with BTL mortgages as they pay cash for their properties and so are not affected by this change in policy at all. The only landlords it will affect are the smaller landlords with a few properties who well may be forced out of the market, and the most likely buyers of any properties offloaded in this manner are the larger landlords. Thus, the private rental market will be driven towards a situation whereby private rental properties are concentrated in the hands of fewer, large suppliers, competition is reduced, and therefore prices (i.e. rents) go up as a consequence. (See the recent report on the energy market for a comparable example.) Good politics (makes a nice headline) but bad policy.

        • lifelogic
          Posted July 9, 2015 at 4:28 pm | Permalink

          Indeed the tax system need to be neutral between using your own cash or borrowed cash.

      • stred
        Posted July 9, 2015 at 11:42 am | Permalink

        BTL landlords who have bought at the recent inflated prices, often using an 80% interest only mortgage, and in the 45% tax income tax band will find themselves subsidising the tenant. It will not be possible to raise rents, as they are already almost unaffordable and HB is being cut. These BTL investments will have to be sold and quickly, as a lot coming onto the market could cause values to fall. Perhaps Mr Osborne’s number crunchers have their eyes on lucrative CGT, often based on unreal gains. This sort of tax grab indicates that politicians either do not understand how business works and rely on civil servants, who don’t care, or otherwise they just like being ministers and don’t care what policies they inflict on minority voters.

        Also, has anyone compared the figure for increased taxes to the cost of HS2. It is about the same as the estimated cost and more likely half.

    • lojolondon
      Posted July 9, 2015 at 11:14 am | Permalink

      Lifelogic, this is all because of the BBC – if Osborne goes for a proper capitalist budget (Thatchernomics) he will be castigated from every angle. To get good press, he has to include the kind of policies that the Biased BBC approves of – ie. Miliband’s policies. A terrible let down from every angle for proper Conservatives.

      • lifelogic
        Posted July 9, 2015 at 4:29 pm | Permalink

        Indeed.

        • Hefner
          Posted July 13, 2015 at 7:22 pm | Permalink

          As if … Completely ridiculous statement.

  4. alan jutson
    Posted July 8, 2015 at 6:28 pm | Permalink

    Yes spending is up more than outlined during the election.

    Do the Tories have a sort of self inflicted pain mentality, forever promising cuts that never seem to be implemented.

    The Good news:
    Personal Tax allowances up a little (but still not enough yet)
    Benefit cap cut.
    Child tax credits cut to two children.
    Corporation tax cut.
    Fuel duty frozen
    Inheritance tax up, but why the silly complication.
    Spending on roads up.
    Tax credits reduced, but still complicated.

    Not sure about much of the rest, all still seems very complicated when we could have simplified the system.

    Much better to have put the price of fuel duty up a little and scrapped VED completely.

    Much more simple benefits formula required.

    Etc Etc.

    At least we seem to be moving in the right direction, although the big gamble is that growth will continue to pay for it all, not something I would have gambled on !.

    • Lifelogic
      Posted July 8, 2015 at 8:11 pm | Permalink

      We are not moving in the right direction at all, taxes are going up yet again and the systems gets more and more complex.

      Lots of parasitic jobs for accountants and tax experts & lawyers and everyone else get poorer and less competitive.

      • alan jutson
        Posted July 9, 2015 at 7:01 am | Permalink

        Lifelogic

        “….Wrong Direction…”

        Whilst tax cuts were talked about, you surely did not expect tax cuts overall did you.
        Do not think we have had a budget for decades where the Government took less !.

        It was always going to be about the detail, it always is, and when you get that detail, its higher taxes overall.

        I think the basic taxes are moving in the right direction, but then we have all the complication and add on’s like IHT house value bits, when it should simply have been £500,000 value to include anything, although thats still only half of what was promised 10 years ago.

        • lifelogic
          Posted July 9, 2015 at 4:31 pm | Permalink

          He promised a £1m threshold each 8 years ago now he give this pathetic fudge and absurdly claims he has kept a promise.

  5. alan jutson
    Posted July 8, 2015 at 6:31 pm | Permalink

    IDS seemed pleased.

    I am pleased for him, he has worked hard to get a better and more fair system, although I do wonder if the State computer system will support all the changes, without massive disruption, complication and the inevitable mistakes.

    • A different Simon
      Posted July 8, 2015 at 11:34 pm | Permalink

      Alan Jutson ,

      The vast majority of the complexity in a software system should be the complexity which is inherent in the subject itself .

      e.g. systems which calculate VAT are complex because VAT is unnecessarily complex .

      A tax gimmick in a budget may necessitate £20 million of upfront software development and increase the cost of all future enhancements (and gimmicks) to the system by say 10% .

      IMHO such gimmicks and exceptions are an abuse of power .

      Perhaps the chancellor should be restricted to announcing only those changes in the budget which the existing computer system supports ?

      I.e. the system has to be enhanced beforehand . This is perhaps the only way to acquaint the chancellor with the consequences (and implementation costs) of his actions .

      When one is developing a computer system one is constantly fighting complexity .

      It is like adding weight to an aeroplane . The undercarriage has to be strengthened which adds more weight , the wings have to be strenghened and extended which adds more weight …. the engines need to be more powerful …. the range is reduced ….

      • A different Simon
        Posted July 8, 2015 at 11:35 pm | Permalink

        …. adding complexity is like adding weight

      • lifelogic
        Posted July 9, 2015 at 4:34 pm | Permalink

        Indeed more and more overhead loads onto industry to handicap it and render it unable to make a profit in the world.

    • Jerry
      Posted July 9, 2015 at 6:48 am | Permalink

      @alan jutson; “IDS seemed pleased.”

      I don’t know what about (around his neck there is still any political fallout should his much delayed and over budget full roll-out of ‘Universal Credit’ fail…), whilst his reaction was a little OTT, perhaps he missed the morning cabinet meeting and thus really didn’t know what was in the Budget.

  6. Lifelogic
    Posted July 8, 2015 at 6:31 pm | Permalink

    You certainly put a positive spin on this essentially incompetent/socialist budget for example “a new system of taxing dividends” – actually just yet another large (and complex) tax increase.

  7. Iain Gill
    Posted July 8, 2015 at 6:42 pm | Permalink

    We are still taxing workers here on work visas a lot less than Brits, a fundamental problem. We are still tolerating big corporates avoiding tax here and paying it instead in tax havens. We are still allowing much of the best British intellectual property, much of it funded one way or another by the state (universities etc), to be moved abroad and used to undercut us. We are still hyping house prices. We are still discouraging savings.

    As for market rents for social housing the reality is the current rents on the sink estates in the North are far above market rents, people able to take their housing subsidy where they want would have let these estates empty long ago. Allow the people to have buying power and see what happens.

    More money for a failing NHS, more money for a failing state schools system.

    All in all better than what labour would have done, but not really good enough.

  8. Edward2
    Posted July 8, 2015 at 7:04 pm | Permalink

    Budgets have to be balanced between economic considerations and political requirements and I think this first Conservative budget for 18 years showed a skillful selection of policies and changes.
    It has taken away many of the ways Labour were planning to attack the Government and make the unruly mob’s aim outside Parliament of stirring up discontent much more difficult.
    It showed both intention, strategy and direction.
    With an eye to the next election it has left Labour looking for a way to become electable again.
    Well done Mr Osborne

    • Liz
      Posted July 9, 2015 at 8:48 am | Permalink

      I agree – the Conservatives certainly won the election but only have a small majority – They cannot ignore the many who did not vote for them. George Osborne did very well politically in his first Conservative budget. Companies may complain about the living wage but how many of them have been paying the absolute minimum to many of their workers then telling them to claim working tax credits to top up their income – i.e. getting the tax payer to subsidise their wage bill – whilst at the same time increasing the pay gap between the top salaries and the l.owest? This has been a major drain on the welfare bill. Stopping this seems to be a very Conservative thing to do.

  9. CHRISTOPHER HOUSTON
    Posted July 8, 2015 at 7:08 pm | Permalink

    The OBR forecast charts are very pretty.

    Not many people are able to forecast over 5 years even to the amount of ice-cream their five year old toddler is going to eat. So many interacting factors, so many other sweetmeats as choices, so many possible fluctuations of currency exchange rates, and absolutely no control whatsoever of any of the constituent commodity prices such as milk, fat, cream, oil, preservative, colouring agents, productions costs etc. The OBR despite a tome of explanatory …explanations, can not be serious! Neither can Mr Osborne. Nor the Oppositions in Parliament who though loquacious criticizing things the Chancellor never said or overlooking things he did say still went along with the narrative. That sort of nonsense is part and parcel of their own subterfuges with their respective electorates.

    Mr Osborne and the OBR are totally unaware of basic information such as:
    1.What are the migrant numbers net entering the UK 2015-2020 ?
    2 What will be the total population 2015-2020?
    3. Price of oil 2015-2020
    4 – 100. What is the price of each imported commodity 2015-2020?

    If one looks at the charts of the Dow, S & P 500 they have been going sideways for the past 5 months. China’s stock market is now in free fall. Half its constituent companies have suspended their trading. No-one noticed? Australia’s main export ..iron ore… sinking in price like a stone. The US Housing market..take a look at the main stock performance for the last two years. Stalled. Heading downwards even though the Fed has been throwing freshly printed money at it upping US debt to monumental heights.

    Good Mr Osborne intends to pay off debt as quickly as possible ” in case of possible downturns in future. ” He should use the nation’s loose change and pay that in immediately. No time to lose.

    • Lifelogic
      Posted July 8, 2015 at 8:14 pm | Permalink

      Mr Osborne intends to piss money down the drain on HS2, endless green crap, the EU and endless other total insanities.

      Pay down the debt as quickly as possible – what do you mean?

    • Hefner
      Posted July 8, 2015 at 8:17 pm | Permalink

      Looking at some of the comments here, I have to conclude it must be a very good (socialist) budget….
      Joke apart, the reduction of benefits to “two-children families” is a rather clever way to put a brake on immigration.
      Now is that the start of George taking over from Dave in 2020?

  10. acorn
    Posted July 8, 2015 at 7:20 pm | Permalink

    What a turnaround from the slash and burn 2010 emergency budget. Or even the March 2015 budget!!! The austerity can, has been kicked down the road and Osbo will keep £80 billion of spending power in the economy to 2020. This is a Mark Carney budget, so be prepared for the words deficit and debt to gradually disappear from the government’s vocabulary, just like Carney did in Canada.

  11. uanime5
    Posted July 8, 2015 at 7:44 pm | Permalink

    I find the cut in tax credits for working families worrying. As tax credits are based on the previous years income raising minimum wage may not offset the loss people will suffer from the reduction in tax credits. Especially if you’re already earning close to the new minimum wage.

    Restricting the living wage to over 25s will prove disastrous as many sectors will simply refuse to hire anyone over 25, resulting in a large amount of work experience from ages 18-24 being completely useless because there’ll be no jobs available. The living wage age should be 18; 21 at the latest.

    Not sure how the chancellor is planning to reduce the amount of rent private landlords charge by 1% per year for the next 4 years. If he believes that he can force the poor to contribute more to the cost of their rent the result will be the working poor being forced out of high cost areas. Housing benefit exists because many working people don’t earn enough to be able to afford the high rents in many parts of the UK.

    Finally I’m rather worried by a possible scam that may result from the chancellor’s plans to restrict benefits for 18-21 year olds who aren’t learning or earning, coupled with removing the restrictions on the number of people who can go to university. This many result in bogus universities or colleges trying to get as many young people as possible to sign up, then telling them how to claim as much as possible in university loans. Since these young people are now in education they can also claim benefits, while the university can get tuition despite not providing any teaching. If these young people never earn enough to pay back these loans then the taxpayer will have to pay them back. So it’s basically like foreign students coming to the UK, then leaving without paying back their university loans; something I suspect will be more expensive than giving them basic welfare.

    • Lifelogic
      Posted July 8, 2015 at 8:16 pm | Permalink

      Indeed all poorly thought through as usual.

    • Lindsay McDougall
      Posted July 10, 2015 at 7:00 pm | Permalink

      What I’m worried about is that – as usual – you don’t have any alternative proposals for reducing welfare or any other type of public expenditure. You could admit that your Big State will need a rise in the standard rate of income tax if it is to be affordable.

  12. DaveM
    Posted July 8, 2015 at 7:53 pm | Permalink

    Now the Budget has been announced and we are in “wait and watch” mode regarding Greece and the EU, can we talk about the unnecessarily complex matter of Devolution within the UK? And the pressing need to come up with a fresh, straightforward, and fair Constitution which will ensure the country my kids and grandkids will inherit is secure and settled within an insecure world? Our grandparents gave everything for this country so we had a good place to live. A bit of apolitical, pragmatic, diligent hard work is surely the least we can do.

    Thanks

  13. Bert Young
    Posted July 8, 2015 at 8:03 pm | Permalink

    I await further follow up details before giving the budget a thumbs up . I certainly approve of the rationalisation of the benefits system and the move to reduce the deficit ; the affirmation of keeping the defence allocation at 2% is also good news . I had hoped the tax rate would have been reduced to 40% because this would have been a major incentive and growth feature .

    • Jerry
      Posted July 8, 2015 at 8:50 pm | Permalink

      @Bert Young; Not sure that lowering the threshold would the right way to go to encourage growth, I suggest improved systems of tax relief on and for those who actually invest in such growth, otherwise the risk is that the only growth is in personal high interest deposit accounts.

      Also please to see that the changes to child benefits makes adjustments for multiple births, no one should be penalised for an unintended “instant family”!…

  14. Jerry
    Posted July 8, 2015 at 8:37 pm | Permalink

    Good news on road investment, and the change to VED (being ring fenced again), the only downside being that I suspect cyclist will be annoyed as once again a certain breed of arrogant motor vehicle driver will be able to tell them “we pay for the roads mate”….

  15. Richard1
    Posted July 8, 2015 at 10:23 pm | Permalink

    There was nothing very radical in this budget. 5 1/2 out of 10 I suppose for not having the absurd class warfare socialism a Miliband- Balls budget would have had. The UK’s tax system needs radical alteration towards a much simpler and flatter model, with abolition of a myriad of exemptions and distortions. IT at 45% is too high and so is CGT at 28%. If these policies can’t be changed now when can they be? It’s good to see green crap being slowly reduced but the pace is glacial. The corp tax reduction and raising of allowances is sensible. The living wage sounds like a gimmick and 25 as the cut off very random. High wages in the UK will come through the market if the right structural reforms are put in place. I am underwelmed

  16. JJE
    Posted July 8, 2015 at 11:59 pm | Permalink

    “No increases in the main taxes”. Just lots of other ones. VED, dividends, interest relief for buy to let, etc. Oh and the bank levy replaced by a bank tax. Not sure yet what that was about.

    But overall there were a surprising number of things where I thought ” I would have done that”. So thumbs up for the Living Wage, the changes to non-Dom status, and using road tax for the the roads.

  17. petermartin2001
    Posted July 9, 2015 at 4:00 am | Permalink

    “Budget offers more spending and more tax revenue”

    Yes of course. It has to be that way. If we consider that money is created by Government when it spends (it certainly isn’t created by taxation) then we have to ask what can possibly happen to that money once it is released into the economy.

    It can only be one of two possibilities. It either ends up being paid back to the government in taxes. Or , it gets saved. Either by you and I, or the central banks of the big exporters. Those savings are , of course, the reason for the deficit.

    So the government’s deficit is really nothing to do with the level of spending or taxation, except insofar as that spending and taxation affects our ability to save and purchase imported goods.

    • Colin
      Posted July 10, 2015 at 6:45 pm | Permalink

      “money is created by Government when it spends”

      What?

      “Those savings are , of course, the reason for the deficit.”

      What?

      “the government’s deficit is really nothing to do with the level of spending or taxation”

      What?

      • petermartin2001
        Posted July 10, 2015 at 11:31 pm | Permalink

        Colin,

        Can I take it that you have some slight reservations over my simple explanation of the economic cycle?

        Can I suggest you start by giving some thought to what money is and why it has a value? Ask yourself where it comes from in the first place.

        Consider the situation where a country is starting off a new currency from scratch. The government can’t raise taxes because, in the beginning, no -one has any of that currency. So it has to spend first and raise the taxes later. Of course it can’t possibly raise more in taxes that it has spent in the first place. It has to be in deficit. Just think about it.

  18. Roy Grainger
    Posted July 9, 2015 at 6:29 am | Permalink

    Hit the motorists again with a big hike in car insurance tax.

    The raised minimum wage and the withdrawal of tax credits is an interesting approach – I guess as a side-effect it may induce some employers to fire older workers and re-employ those under 25 which is actually not such a bad idea when it comes to social engineering.

    • Roy Grainger
      Posted July 9, 2015 at 8:34 am | Permalink

      The Guardian points out rightly that the phasing out of tax credits renders pointless Mr Cameron’s EU negotiating goal of restricting them for 4 years for EU migrants whilst his raising of the minimum wags will encourage even more EU migration.

  19. Roy Grainger
    Posted July 9, 2015 at 7:46 am | Permalink

    The dividend tax changes will negatively impact me, however it is clear that the likes of multi-millionaire BBC “talent” had just been using the previous regime as a means of avoiding income tax (and employer and employee NI) so I think the package of changes in this area are justified.

  20. Brian Tomkinson
    Posted July 9, 2015 at 8:06 am | Permalink

    So much for fixing the roof while the sun shines. Not only is Osborne delaying elimination of the deficit he is piling additional costs on businesses. Has he , just like Brown, decided that he has ended boom and bust? Growth is presumably to continue unabatted despite the problems in the eurozone and China.
    Several times on the Today programme Osborne said that the debt was reducingeach year. That can only be if expressed as a % of GDP if he is still spending £bns more than he collects in taxation.
    Just where will we be when the next downturn comes if the government debt is approaching £1750bn and business has been landed with all those additional costs, which will no doubt be seen in higher consumer prices?

    • Brian Tomkinson
      Posted July 9, 2015 at 8:07 am | Permalink

      ‘unabated’

  21. Martin
    Posted July 9, 2015 at 9:28 am | Permalink

    What happens to the Road Tax money when Mrs May’s Nimbys veto plans to widen the M4? Isn’t the road tax fund going to end up in the Treasury’s coffers?

    That and the insurance tax hike make it all smell like a re-branded war on the motorist!

    • Jerry
      Posted July 9, 2015 at 5:57 pm | Permalink

      @Martin; Surely any RFD/VED not used for one road scheme will get used on another, after all there are enough schemes, some dating back to before 1997, never mind 20 years of delayed repairs and (true) safety improvements.

  22. Hefner
    Posted July 13, 2015 at 7:24 pm | Permalink

    This blog is often entertaining, but these last few days have set the record even higher. A real delight.

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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