Emergency Budget

[Ashley]

Officially announced and its going to impact all of us (joy!) so thoughts and opinions.

 

In brief:

 

The rate of VAT will rise from 17.5% to 20% from January 4, 2011.

 

Personal income tax allowance to be increased by £1,000 in April to £7,475 - worth £170 a year to basic rate taxpayers.

 

No change to cigarettes, alcohol and fuel this time round. Labour's plan to increase the duty on cider by 10% above inflation will be scrapped from July.

 

The capital gains tax "entrepreneurs relief" rate of 10% on the first £2m of gains will be extended to the first £5m.

 

A "landline tax" to fund the rollout of fast broadband will be scrapped - instead the government will support private investment, partly funded by the digital switchover under-spend within the TV licence fee.

 

New maximum limit of £400 a week will be applied to Housing Benefit, to save £1.8bn a year by the end of the Parliament.

 

Low income families will get more Child Tax Credit - the amount per child will rise by £150 above the rate of inflation next year.

 

Public sector workers face a two-year pay freeze, although 1.7 million of those earning less than £21,000 will get a flat pay-rise worth £250 in both years.

 

The basic state pension will be linked to earnings from April 2011, with the pension guaranteed to rise in line with earnings, prices or 2.5%, whichever is the greater.

 

The government will accelerate the increase in state pension age to 66.

 

From April 2011, the threshold at which employers start to pay National Insurance will rise by £21 per week, above indexation.

 

Tax relief for the video games industry will be scrapped.

 

More here: http://news.bbc.co.uk/1/hi/politics/10374475.stm and elsewhere

 

I see a lot of people complaining about the VAT increase on facebook but really, on the day to day it doesn't make too much of a difference. Or at least it didn't when it went down by as much. To me anywho.

 

I wish the government would help support the arts (video games in this instance) more but given the circumstances I don't expect. Would just be nice is all.

[nightwolf]

I have to agree about video games, given I want to be in the industry and a lot of the people here playing games and buying them, supporting companies on a day to day basis.

 

I'm not to fussed about this budget, as you say the VAT increase unless you deal with vast amounts of expensive things this won't affectively anyone massively.

 

I have a lot of people mentioning about leaving the country, sorry but did nobody realise these things were going to happen...0.o?

[Eenuh]

Heh it's not like they won't have to pay taxes in other countries. Honestly every country (well developed country) has its good and bad points.

[Ashley]

I have to agree about video games, given I want to be in the industry and a lot of the people here playing games and buying them, supporting companies on a day to day basis.

 

Mhm if tax breaks are given it can really help an area develop. Look at somewhere like San Diego. A lot of shows are filmed there rather than L.A. because of the tax breaks and then it brings in jobs to the area etc. And obviously Canada on a bigger scale as its apparently a lot cheaper to film there, hence why shows like BSG are/were filmed there. But I understand it can be a risk.

 

Isn't Harry Potter mostly filmed in America because its cheaper?

[Serebii]

I think they actually did quite well considering they're trying to clear the £155bn debt left behind by Labour. I mean a 2.5% VAT increase is mere pennies for us but ends up as billions of pounds

[nightwolf]

Mhm if tax breaks are given it can really help an area develop. Look at somewhere like San Diego. A lot of shows are filmed there rather than L.A. because of the tax breaks and then it brings in jobs to the area etc. And obviously Canada on a bigger scale as its apparently a lot cheaper to film there, hence why shows like BSG are/were filmed there. But I understand it can be a risk.

 

Isn't Harry Potter mostly filmed in America because its cheaper?

 

I agreed with your point rather than the point of them not doing anything.

 

Really the UK needs to get in line with other countries which is why a lot of companies (gaming ones espcially) had bases in america and europe because they are more supported.

 

It's no wonder I'm thinking of moving abroad for work.

 

edit: The only thing that really worries me right now is petrol, it's started to slowly come back down but I can imagine if this continues I won't be able to afford to pay to run my car, at some points petrol stations in services were charging 1.33! I can't pay that much!

Edited June 22, 2010 by nightwolf

[Serebii]

I have to agree about video games, given I want to be in the industry and a lot of the people here playing games and buying them, supporting companies on a day to day basis.

 

I'm not to fussed about this budget, as you say the VAT increase unless you deal with vast amounts of expensive things this won't affectively anyone massively.

 

I have a lot of people mentioning about leaving the country, sorry but did nobody realise these things were going to happen...0.o?

Indeed. When Labour lowered the VAT, they said that they were going to raise it higher than this to counter it later on. As you can see with those moaning about the VAT, people just over-react, have short memories and/or are just generally thick.

[Mr_Odwin]

The 2.5% increase in V.A.T. should add about 2.1% (1.2/1.175) onto existing prices so it's not quite as bad as at first glance. Most other EU countries have a VAT tax of around 20% already. (Or so the little table on BBC News tells me.)

Apart from that I'm being left relatively unscathed by this budget. Yay for private sector employment and a rise to tax free allowances!

[Eenuh]

I just looked this up, and we seem to have three different VAT taxes going: 6%, 12% and 21%. First is for basic products and services with a social character, second for certain products and services that are important from an economical or social viewpoint. And then lastly "the other stuff" haha (cars, appliances, cosmetics etc.).

[Will]

Can't see any issues with it myself, something had to be done and I can't see it effecting me too badly.

[jayseven]

When VAT went down it was rare to really see that come out in prices, but as soon as it went back to 17.5% I saw prices increase! Shops will take advantage of an increase in VAT ever more readily, and my issue with the rise in VAT is that it affects those with a lower income who are watching every penny as it is far more than it will affect those who are comfortable.

 

The cider thing is a good bit of news for me (woo :P), will see if it really happens. However, I was watching the budget and the aftermath on telly and the chancellor made it clear that he will address duties come autumn, so I expect to see something else then.

 

But hey, pull up our socks and get the debt sorted, I guess! No doubt a future government, in times of plenty, will bring the VAT back down.

[Platty]

My bad pay is frozen for 2 years. Thanks Tories. I struggle as it is and won't even be getting the basic inflation rises for the next two years seemingly.

 

Scew you and screw all the people that voted for you.

 

/end rant

 

VAT rise won't really be too much of an issue for me I don't think. But the budget does look like it will hit those on lower pay more. Same old tories really, look after their own. We'll have to see how it all pans out.

[Mr-Paul]

Yay: No more cider tax.

Boo: VAT rise.

 

Was all quite typically tory really. Sad to see Lib Dems who were against most of what was announced before the election try and justify it.

 

I still think they're cutting too soon. We'll see though.

[Serebii]

Yay: No more cider tax.

Boo: VAT rise.

 

Was all quite typically tory really. Sad to see Lib Dems who were against most of what was announced before the election try and justify it.

 

I still think they're cutting too soon. We'll see though.

You say that, but Labour actually planned to do this themselves. They said as such when they lowered the VAT rate to 15%.

[Raining_again]

It's disgusting that they aren't taxing people who drink and smoke. These things aren't life dependant, like food & petrol. I am a drinker (on ocassion) and I wouldn't care if they taxed it, I'd just drink a bit less if I couldn't afford it.

 

I feel for the families that are struggling as it is without all of these rises.

 

And I heard about the DLA thing too, definitely a positive step, its about time they got checked.

[Sheikah]

VAT rise won't really be too much of an issue for me I don't think. But the budget does look like it will hit those on lower pay more. Same old tories really, look after their own.

Hardly:

Low income families will get more Child Tax Credit - the amount per child will rise by £150 above the rate of inflation next year.

 

Public sector workers face a two-year pay freeze, although 1.7 million of those earning less than £21,000 will get a flat pay-rise worth £250 in both years.

 

And increasing tax will ultimately result in higher spenders paying more money (the rich).

[Platty]

Hardly:

 

 

And increasing tax will ultimately result in higher spenders paying more money (the rich).

 

Hardly???

 

My pay is frozen.

 

Train fares go up every year, Car insurance and tax has already gone up, Gas and leccy gone up. Water rates will go up.

 

Me = worse off.

 

Many in the same boat will be worse off too. Same old tories.

[Sheikah]

Hardly???

 

My pay is frozen.

 

Train fares go up every year, Car insurance and tax has already gone up, Gas and leccy gone up. Water rates will go up.

 

Me = worse off.

 

Many in the same boat will be worse off too. Same old tories.

If you were really poor and getting £21k or less you'd have an increase, as it says...

 

Most of those things you list are down to companies as well as the government. You say train fares go up every year - since this has been happening every year, and therefore when the Tories weren't in power, how is this the Tories' fault?

 

And they did say they will increase tax credit for poorer families. So clearly they're not just 'looking after their own' like you say.

[Platty]

Most of those things you list are down to companies as well as the government. You say train fares go up every year - since this has been happening every year, and therefore when the Tories weren't in power, how is this the Tories' fault?

 

Of course that's not the Tories fault. However, in previous years we would get a pay increase to reflect generic inflation which covers rises in outgoings such as train fares. The pay increase would all go on covering the yearly rises in bills and not into my pocket. The rises were not very much depsite what the public think but they helped out and was needed.

 

For the next two years I have no pay increase to cover these bills due to the Tories new budget. The next two years for me are going to be more of a struggle.

 

I blame that on the tories.

 

I've never lived beyond my means, never had a credit card, never had a loan, never had finance, always tried to save when I can. Yet people like me are going to suffer.

 

booooooooooo.

 

Anyway I'm done with this. You know my feelings.

 

I only hope D. Milliband wins the Labour leadership and has a successful opposistion campaign over the coming years.

[Serebii]

Hardly???

 

My pay is frozen.

 

Train fares go up every year, Car insurance and tax has already gone up, Gas and leccy gone up. Water rates will go up.

 

Me = worse off.

 

Many in the same boat will be worse off too. Same old tories.

Sorry but you can't blame this on the Tories.

 

Labour are the cause of all of this. They plunged the country into £155bn of debt. They lowered the VAT to "encourage spending", knowing and stating that VAT will need to be increased to at least 20% in a later year.

 

To sort out the unsustainable debt, which was at a point where the interest for it would be higher than all of the expenditure the government has in a year, sacrifices need to be make. Over a couple of years, train fares will not increase to a point where it will actually make you struggle, nor will inflation or anything.

 

If this wasn't done, then the country would fall into a recession. Not like the media fuelled one of last year, but one like the depression in America.

[Mr-Paul]

Sorry but you can't blame this on the Tories.

 

Labour are the cause of all of this. They plunged the country into £155bn of debt. They lowered the VAT to "encourage spending", knowing and stating that VAT will need to be increased to at least 20% in a later year.

 

To sort out the unsustainable debt, which was at a point where the interest for it would be higher than all of the expenditure the government has in a year, sacrifices need to be make. Over a couple of years, train fares will not increase to a point where it will actually make you struggle, nor will inflation or anything.

 

If this wasn't done, then the country would fall into a recession. Not like the media fuelled one of last year, but one like the depression in America.

 

 

 

Labour were trying all they could to avoid increases in VAT, instead preferring to gain tax from other luxury items such as alcohol, and those who worked through NI rises. VAT hurts those who don't have money to spend.

 

£155bn isn't the debt, it's the deficit. The money the government are borrowing each year over what they can afford. The overall debt is a lot higher.

 

Keynesian Economics suggests that a deficit is alright as long as growth is being achieved. This is the principle Gordon Brown was working under to recover from the recession, and the Tories actually agreed with this approach and Brown was praised around the world, actually. You say that if we didn't make drastic cuts now we'd fall into recession, but I believe these cuts will lead to a greater risk of another recession.

 

Can you explain what you mean by media-fuelled recession? Because the last few years have definitely not been that.

 

Tories argue that Canada were in this situation in the 90s and got out of it by cutting. They were supported by a strong US economy. Our main supporting economy is the EU, which is probably in an even worse state than we are.

[Serebii]

The recession was media fuelled. Originally, it wouldn't have had a bad effect on the economy. Yes it would have caused issues, but when the media grabbed hold of it, everyone stopped spending and boom, the recession got bad.

 

I also meant deficit and not debt, not entirely sure why I wrote debt.

[Mr-Paul]

The recession was media fuelled. Originally, it wouldn't have had a bad effect on the economy. Yes it would have caused issues, but when the media grabbed hold of it, everyone stopped spending and boom, the recession got bad.

 

I also meant deficit and not debt, not entirely sure why I wrote debt.

 

I think it's unfair to blame the media when it has been a worldwide recession with many causes, from the banking sector and from past government spending policies and debt. It is unfair to just blame Labour as there had been a consensus around the world, both on the right and left wings, with the tories of Thatcher/Major then Blair/Brown, that this neo-liberal approach of the free market and high public spending was the way to go.

 

Of course the media have some effect on how people act, but they don't say "DON'T SPEND ANY MONEY!" and people then do it, they do what they're meant to do, report what is happening. If you're going to take that view, you can blame the media for anything.

[Serebii]

That's such a naive view. The media doesn't just report on news, it manipulates people's views with their own bias. You just need to look at the Russel Brand stuff a couple of years ago to see how easily the media manipulates.

Edited June 22, 2010 by Serebii

[Mr-Paul]

That's such a naive view. The media doesn't just report on news, it manipulates people's views with their own bias.

 

I wasn't denying its influence and bias.

But I think it's more naive to think that the media caused the recession.