Osbornes budget

[french frank]

I think you need to be a tad careful about raising this government's promises/guarantees, whatever you want to call them, french frank.

I'll believe it when I see it. I hope that my pessimism proves to be unfounded

What about the comment on pensioners? . The increases have been announced.

(Oh, and that was a LibDem contribution :-P )

[aka Calum Da Jazbo]

yep 1000 jobs without blackmail would be fantastic but with blackmail [be in no doubt this is what it is] i am very troubled by the direction this takes economic policy ..... why don't we start talking drug prices to the NHS eh .... or wpould the uk oligarchs get too pissed off and take their toys elsewhere? .... this is crony and gansgta capitalism ...

yes as a pensioner i will be getting increases in the pension ... and the changes will hurt better off pensioners more but my grannies were poor so it is the whole context of the aged that i think matters ...care health housing food transport etc ... and i think they are poorer and markedly so as a result of Mr Osborne's interventions ....

even if one agrees [and i probably do] that the age related allowances were an anomaly etc it was an extraordinary choice to make now and in the context of cutting the 50p and dodging wealth tax [stamp duty does not really cut it ] .... it is as Robinson puts it a huge gamble .... and not one i feel is either prudent or wise leadership ....

but let's see if us muppetts really give a damn .... they are striking today in Portugal

[amateur51]

but let's see if us muppetts really give a damn .... they are striking today in Portugal

After all the mockery that Dennis Skinner has had to endure from Cameron recently, I hope that DS will be leading from the front when us wrinklies and crumblies take to the streets.

[John Skelton]

Isn't this what is needed for 'growth'? Aren't 1,000 jobs a good thing?

"The introduction of the patent box has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain," said Glaxo chief executive Sir Andrew Witty.

"Consequently, we can confirm that we will build GSK's first new UK factory for almost 40 years."

Maybe I lack faith, but I find it s l i g h t l y difficult to believe that GlaxoSmithKlein decided to build a new factory purely on the basis of "the introduction of the patent box." I'm only guessing, but I would guess that a good deal of planning, projecting, and calculation of variables goes into a decision like that. Not to mention a fair bit of politics. (Yesterday evening: "Hello, is that Smith the Builders?" "Yeah, who wants to know?" "My name's Sir Andrew Witty and as a result of the wonderful budget and the ever so wonderful patent box I'd like you to build a new factory for us." "How big?" "Big enough for 1,000 workers!" "OK, but it'll have to be next week. We're still up Mrs Sudbury's roof.")

A really nasty, cynical, person might think it all came out a bit pat, demonstrating the immediate benefits of the Coalition's exciting new business friendly budget. "Hello, Andy, it's George." "Hello, George." "I'd like to make you chaps better off. I wonder if you could do me a bit of the old PR." "Absolutely, old chap."

Looking forward to the evidence flooding in of tax avoiders at the 50p rate queuing up to pay at the 45p rate . Can't be any doubt that's what will happen, can there?

[amateur51]

"The introduction of the patent box has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain," said Glaxo chief executive Sir Andrew Witty.

"Consequently, we can confirm that we will build GSK's first new UK factory for almost 40 years."

Maybe I lack faith, but I find it s l i g h t l y difficult to believe that GlaxoSmithKlein decided to build a new factory purely on the basis of "the introduction of the patent box." I'm only guessing, but I would guess that a good deal of planning, projecting, and calculation of variables goes into a decision like that. Not to mention a fair bit of politics. (Yesterday evening: "Hello, is that Jones the Builders?" "Yeah, who wants to know?" "My name's Sir Andrew Witty and as a result of the wonderful budget and the ever so wonderful patent box I'd like you to build a new factory for us." "How big?" "Big enough for 1,000 workers!" "OK, but it'll have to be next week. We're still up Mrs Sudbury's roof."

A really nasty, cynical, person might think it all came out a bit pat, demonstrating the immediate benefits of the Coalition's exciting new business friendly budget. "Hello, Andy, it's George." "Hello, George." "I'd like to make you chaps better off. I wonder if you could do me a bit of the old PR." "Absolutely, old chap."

Looking forward to the evidence flooding in of tax avoiders at the 50p rate queuing up to pay at the 45p rate . Can't be any doubt that's what will happen, can there?

All best wishes for Mrs Sudbury's roof - she's chosen a cracking spell of weather for having it done, mind

[John Skelton]

All best wishes for Mrs Sudbury's roof - she's chosen a cracking spell of weather for having it done, mind

True. She's just put the tea on. After that we'll have our sandwiches, then there's just a little job we promised we'd do this afternoon but we'll be back around three except Jim forgot he's got a hospital appointment and I can't drive the van because of my sprained wrist which I did on Tuesday so we'll see you on Monday then, Mrs Sudbury? What happened to Friday? Ah, well ....

[Lateralthinking1]

Isn't this what is needed for 'growth'? Aren't 1,000 jobs a good thing?Has everyone already forgotten the government's 'Triple Guarantee' from last year? "Under its ‘triple guarantee’, the Government is committed to increasing the [Basic State Pension in line] with earnings, CPI inflation or 2.5 per cent, whichever is highest."

As a result of this, pensioners will be getting an increase next month of just over 5% on the BSP, plus added increases on any of the bits and pieces that many pensioners get (pre 97 ASP, graduated Retirement Benefit), typically amounting to something like 5.5%.

That guarantee puts them in a better position than most wage earners on £24,000 or less, which is presumably the rationale for aligning the basic personal allowance.

I'm not sure that I understand the "£24,000 or less" point frenchfrank.

Also, the Triple Guarantee. For how long is this intended to apply?

[scottycelt]

Isn't this what is needed for 'growth'? Aren't 1,000 jobs a good thing?Has everyone already forgotten the government's 'Triple Guarantee' from last year? "Under its ‘triple guarantee’, the Government is committed to increasing the [Basic State Pension in line] with earnings, CPI inflation or 2.5 per cent, whichever is highest."

As a result of this, pensioners will be getting an increase next month of just over 5% on the BSP, plus added increases on any of the bits and pieces that many pensioners get (pre 97 ASP, graduated Retirement Benefit), typically amounting to something like 5.5%.

That guarantee puts them in a better position than most wage earners on £24,000 or less, which is presumably the rationale for aligning the basic personal allowance.

One of the problems with the pensioner allowance freeze is that it is about the only thing that wasn't 'leaked' beforehand and therefore came as a shock to everybody. It used to be the case that Chancellors leaked bad news early to hopefully get it out of the way and reserved any 'goodies' for the day itself. This time the reverse appears to have happened and it does seem almost frighteningly inept. No wonder Miliband had a field day, and probably enjoyed his finest performance in the Commons to date.

I think telling pensioners how apparently lucky they have been recently is a bit lame. Any 'simplification' could have been done more gradually and if money were required more urgently the LD idea of a Mansion Tax might have seemed slightly fairer in the circumstances. Instead many lowly-paid pensioners were chosen to bear the brunt of the changes to assist low wage-earners which has many scratching their heads in bewilderment, not just pensioners!

Not the Coalition's finest hour, imo ...

[JimD]

I wonder whether Osborne was able to keep a straight face when referring this morning to the large increase in the state pension of £5 per week which is upcoming. I also wonder how many seconds of consumption at your average Bullingdon Club dinner a fiver would fund.

[french frank]

I'm not sure that I understand the "£24,000 or less" point frenchfrank.

That's the lowest pensioner grade at which they get the £10,500 tax free allowance. Wealthier pensioners don't have the same benefit.

Also, the Triple Guarantee. For how long is this intended to apply?

There is no stipulated end. If this government (or an extension of it) reneges on the guarantee, that would provide legitimate grounds for objection. One might also note that the very poorest pensioners in terms of income are already not paying any tax and won't be in spite of the allowance freeze.

If this government (or an extension of it) were to renege on the guarantee, it would be legitimate to make a fuss. In the meantime, pensioners are guaranteed an increase in BSP of at least 2.5%, even if average earnings and CPI are lower.

JS

Looking forward to the evidence flooding in of tax avoiders at the 50p rate queuing up to pay at the 45p rate . Can't be any doubt that's what will happen, can there?

But it also applies to the next generation of £150,000 plus earners who haven't been avoiding the top rate because it didn't apply to them but will soon. Incidentally, Stephanie Flanders provides part of the answer to johnb's question on how much that cut 'costs'. Tax cuts change 'behaviour' and a fair amount of tax avoidance at the top comes from people working fewer hours/paying themselves less or even retiring earlier than they might otherwise have done, rather than dodgy 'tax dodges'. One could hypothesise that a cut from 50p to 45p is psychological - you still take more than you give to the government.

As for a 'business friendly' budget: no government can win on this. Of course governments talk to businesses about what would make them build factories, create jobs, stay in the country or whatever. And of course the people at the top benefit if it's private enterprise; in fact they benefit, individually, disproportionately if you compare them with the average worker. But the alternative (in a capitalist system!) is that they don't build factories, don't create jobs and they move their businesses elsewhere. And they're still stinking rich.

The cut from 50p to 45p (still higher than when Alistair Darling introduced the 'temporary measure' which was only in force for little over one month of Labour's 13 year spell in office) is a double gamble: it's a political/electoral gamble - but it's also a fiscal gamble. According to Flanders the theory is that behaviour changes will result in more tax being collected from the very rich. But this is where numbers are impossible to calculate.

[Flosshilde]

I wonder whether Osborne was able to keep a straight face when referring this morning to the large increase in the state pension of £5 per week which is upcoming. I also wonder how many seconds of consumption at your average Bullingdon Club dinner a fiver would fund.

Or how many seconds of consumption of electricity/gas for the pensioner's heating.

[John Skelton]

According to Flanders the theory is that behaviour changes will result in more tax being collected from the very rich. But this is where numbers are impossible to calculate.

http://commentisfree.guardian.co.uk/pigs.jpg

[Flosshilde]

That's the lowest pensioner grade at which they get the £10,500 tax free allowance.

I thought that the £10,000 personal allowance (which doesn't come in yet) was for people in employment?

[LHC]

I wonder whether Osborne was able to keep a straight face when referring this morning to the large increase in the state pension of £5 per week which is upcoming. I also wonder how many seconds of consumption at your average Bullingdon Club dinner a fiver would fund.

Since most of them now eat in the heavily subsidised members' restaurants at the House of Commons, I imagine that a fiver would fund a fair bit.

Perhaps that's the problem. When you can have filet mignon for lunch for about £2.80, you forget that real people have to pay real prices for their grub.

[Lateralthinking1]

That's the lowest pensioner grade at which they get the £10,500 tax free allowance. Wealthier pensioners don't have the same benefit.There is no stipulated end. If this government (or an extension of it) reneges on the guarantee, that would provide legitimate grounds for objection. One might also note that the very poorest pensioners in terms of income are already not paying any tax and won't be in spite of the allowance freeze.

If this government (or an extension of it) were to renege on the guarantee, it would be legitimate to make a fuss. In the meantime, pensioners are guaranteed an increase in BSP of at least 2.5%, even if average earnings and CPI are lower.

Thank you frenchfrank. My gut reaction yesterday has changed slightly and is now more complex:

Personal tax allowances

God knows why anyone should offer magnanimous comment in this climate. I am not in any way inclined to defend the changes to the allowances. However, in the present day, I don't think that they are completely out of order for current pensioners. That said, it does as I have written before punish those of them who really made an effort to save more. That is not a good signal. I don't know if my own parents will be affected. They were highly responsible but on a relatively small income so possibly not.

For those under 65, it is less acceptable. It is a further blow following the pensions scandals in both the private and the public sectors. As it is, people are already beginning to wonder how they will manage in old age. I hear a lot of understandable arguments from people under 40 about the realities of living longer and how the middle aged need to get real. I would though suggest to them that longer term thinking suggests that whatever levels we retain, they are more likely to retain themselves.

CPI versus RPI

There has been a lot of upset about the move from RPI to CPI, particularly among those in their 50s and early 60s. By one of the ironic peculiarities of fate, CPI offered more reward in the first year of this change than RPI would have done. This won't continue. I wonder though having looked at the formula of alternatives you have presented whether the annoyance is overly stated. I would be interested to hear your view on this point from what, if I may describe it as such, is a centre ground perspective.

The Coalition - public relations

In terms of public relations, the budget has been a minor disaster for the Coalition. Alastair Campbell would never have let it see the light of day. Two reasons. The first is that it was a huge mistake to introduce the change to the personal allowance for the retired in combination with the move to 45%. If they were to be done, they should have been done separately. A big error.

Secondly, for a very long time, I have been saying that what they have got away with on diminishing pension rights for the middle aged has only happened because none of us are old now. It is hard for younger people, and sometimes even us, to see it as an assault on frail, elderly people when we are not frail, elderly people just yet. Now that smokescreen which was so useful to the Government - the one of artificially dividing out life so that the young are always young, the middle aged are always middle aged and the current elderly will always be the elderly. They have themselves taken it away. By targeting current pensioners, it looks diabolical and brings sharply into focus the diabolical nature of attacking all pension rights for people of whatever age.