The Budget – Initial Thoughts

Mar 25, 2013 by

Perhaps the biggest shock in this week’s budget is that it seems to have gone relatively well for the Government from a PR perspective (at least so far!). For sure, we can all expect to have a conversation with someone this week moaning that “He’s only taken a penny off beer” or questioning the wisdom of slightly tweaking this or that tax rate or allowance, but the overall response seems to be, at worst, broadly neutral. Compared to previous years, this is progress!

A clear highlight of the budget was the two initiatives linked to kick starting the housing market. These came as a genuine surprise. Although there are some well discussed risks and challenges related to the schemes, as proposed, it is hoped that the specifics and details will be ironed out in short order and that both schemes will get the market moving again. However, any plan to encourage house building needs to be considered in the light of our local issues in Broxtowe related to protecting our greenbelt land from developers. Schemes to encourage new building should not be taken as a charter to simply pave over our increasingly scarce greenbelt areas. That particular battle will continue for some months to come.

Another current news story that is actually of direct relevance to our UK budget discussions is the continuing shambles to rescue the banking system in Cyprus. It is apparent that the Eurozone continues to contract economically and this alone will have a major impact on the ability of the UK to grow as hoped. The direct effects of the Euro crisis (this week coming to you from the Eastern Mediterranean, next week, who knows?) will continue to limit the ability for the UK to reduce taxes and implement measures to encourage growth.

It would be nice if our national politicians from all parties could try to engage with each other constructively and positively to identify what, if anything, can be done to help individuals and businesses across the UK in the context of continued, global, economic pressures. With elections looming ever closer in 2015, it is highly unlikely that this will ever happen, of course, but it isn’t impossible. All mainstream parties appear to be playing sensibly together to consider the longer term with respect to the proposed High Speed Extension (HS2). Surely the economic future of our country (as youth unemployment exceeds 20%, growth is minimal and external pressures remain) is an even more important issue of long term national interest?

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