Wednesday, April 22, 2009

Budget liveblog

I do actually write about serious stuff at!


Spear's will be bringing you live updates from the Budget with analysis of what this means. You can follow its tweets at

We'll be back with quotes from tax experts starting at 3.30. Join us then.

'All Labour governments run out of money. What's the point of this government of the living dead. If they can't manage the money, why don't they make way for the team that can?'

Great Cameron joke about applying the new scrappage scheme to the Labour government. Another one about the IMF. I like the wit.

Cameron doesn't talk about the 50% tax rate but goes straight to the man-on-the-street beer and petrol taxes. Might Tory grandees not be demanding greater indignation?

Call Me Dave is up. 'Any claim they have ever made to economic competence is dead, over, finished.' Public borrowing will be greater over next two years than in past 300 years. Total borrowing over next four years: £606bn.


INCOME TAX: 50% above £150,000 from next April, a year early. Personal allowances over £100,000 fully withdrawn.

£1bn extra revenue over next three years from stopping tax evasion.

Pension tax relief restricted for those with incomes over £150,000.

UK net debt (including banks) to GDP ratio: 68% (2010-1) 74% (2011-2) 78% (2012-3) 79% (2013-4).

Public sector borrowing: £175 billion, 12% GDP this year.

'I commend this speech to the House.' Someone has to.

ISA limit is £7,200 - to go up to £10,200, £5,100 in cash, for 50s or over this year, next year for everyone else.

Pensions will rise by 2.5% regardless of inflation in December. Extra winter fuel allowance to be maintained.

"Hope for the future." As opposed to hope for the past or reality for the future, a reality of hurting those who contribute most taxes to the economy directly and indirectly.

A debt to GDP ratio of nearly 80% in 2013-4 is huge, much much bigger than he forecast in November. Guess it'll be Cameron's problem. This is all assuming that growth restarts - if it's postponed, this could rise.

Carbon to be cut by 34% - binding target.

Will the new tax rate make this a redistributive budget or the one that causes HNWs to flee?

North Sea oil extraction is expensive, so 2bn barrels to be taken out of smaller oil fields. Not a green budget then.

Corporate governance and remuneration at banks to be reformed, capital and liquidity, transparency of regulations. All in line with G20. Treasury paper to be published. Will be an interesting read for the Square Mile.

Darling has hit the easy target, walloping the rich by increasing a proposed tax rate of 45% for money above £150,000 to 50%. Labour can't have got many votes from this category anyway, but now it'll be impossible. It seems like it might well drive high-earners in the City away, or at least force them to be thoroughly devious.

Booze and fags up 2%, petrol duty up 2p in September.

INCOME TAX: 50% above £150,000 from next April, a year early. Personal allowances over £100,000 fully withdrawn.

£1bn extra revenue over next three years from stopping tax evasion.

1/4 of the pensions tax relief goes to top 1% of earners.

Pension tax relief restricted for those with incomes over £150,000.

UK net debt including banks: 68% (2010-1) 74% (2011-2) 78% (2012-3) 79% (2013-4).

Public sector borrowing: £175 billion, 12% GDP this year.

2010 onwards:



Learnt from interwar mistakes: no deflation to get out of a recession. Fiscal easing of 0.5% this year, 0.8% tightening each year until 2013-14. Budget deficit halved in next four years.

Tax revenues down (previously financial sector 27% public revenues), corporation tax and income tax revenues down, stamp duty down, tax as part of GDP 1.2% down.

Scrappage scheme: £2,000 discount on cars over ten years old. Mandy to give more details.

Guaranteeing mortgage-backed securities - isn't that how we got here?

Darling seems optimistic for future growth: he says we have a diversified economy, but with financial services and London weighing so heavily, where is this diversity? The pound is recovering meaning manufacturing isn't going to be (and isn't now) the source.

Economy to grow by 3.5% years after 2010.

Inflation down to 1% by the end of the year. RPI down to -3% in September. Deflation!

GDP -3.5% this year but to start growing again, suffering less than the Eurozone and elswhere. 1.6% contraction 4Q08, similar 1Q09.

1.25% growth in 2010.

G20 rehearsal, details of which you can see in my liveblog here.

Economy to start growing by end of year? What does he know that we don't?

Darling outlining our current crisis for the benefit of those who have been under rocks. Everyone else's economies and exports are declining too.

Investment will be protected and financial services rebuilt (does that mean RBS's smashed windows?). No repeat of inertia that led to last Depression.

Darling up.

A good post from Stephanie Flanders: watch out for the date the UK returns to positive growth (now 0.3% in 2010), the date the debt ratio gets under control (now 2015-16) and 'the forecast real growth in total spending from 2011-2016. In the PBR he was looking at average real terms growth of 1.1% a year.' Of course, debt-to-GDP ratio is also key (PBR in November said 57%).

Just watching PMQs. Business as usual.

Net borrowing for 2008-9 was £90bn, below expectations but above the Pre-Budget Report.

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