"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or your arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that you were our countrymen."

Tuesday, 22 June 2010

Budget: Summary + Video

Osborne gave an assured performance in the House this afternoon and many of the words we were expecting made an appearance: tough, hard, roof, together, fair, balanced.  It was noisy, thanks to the jeers of the Labour benches.  Here are some rough notes which give an overall picture of the detail I managed to glean:

The country has been over-spending; it has not been under-taxed.  77% spending cuts and 23% tax measures.

The country will not be joining the euro "in this Parliament" so he has abolished the Treasury's Euro Preparations Unit - staff have been redeployed.

Additional expenditure reductions of £30bn pa until 2014.  Capital spending will not be cut.  Priority given to projects that give "significant economic returns to the country".

Student loan book, the Tote, high speed rail, national air traffic control up for sale and no more public money for Royal Mail.

The Civil List will not be increased this year and a new means of "consolidated support" will be developed for the future.

Public sector pensions have been insulated so far but John Hutton will provide an interim report for changes to be made.  There will also be a two-yr pay freeze excluding the lowest paid - those earning less than £21k a year.

Ops allowance in Afghanistan increased.

State pension age to be increased to 66yrs.

Top salaries to be no more than  20x the lowest paid.

Corporation tax rate will be cut to 27% from next year falling to 24% in four years - one of the lowest rates - to encourage private enterprise.

Small companies tax rate to be cut to 20%.  Enterprise Finance Guarantee Scheme to be extended.

Annual investment allowance will be increased to £25k pa.

Banking sector will make "more appropriate contribution" reflecting the risks they pose.  From Jan 2011 there will be a bank levy generating over £2bn pa in revenue.

Landline tax to be abolished (not yet introduced but a Labour proposal in the Digital Economy Bill).

New businesses set up outside London & South-east will be exempt from up to £5k NI employers' contributions for first ten employees for the next three years.

VAT to be raised to 20% but the scope not extended.

No new duties on alcohol, fuel or tobacco.  Cider duty increase to be abolished.

Council tax to be frozen until 2011.

CGT increased to 28% for higher rate tax-payers from midnight tonight.

Personal tax allowance increased by £1k in April to £7,475.  Higher rate threshold remains frozen until 2013/14.

Pensioners to have earnings link restored from April 2011.  "No more 75pence increases under this govt - Pensioners will live with dignity in retirement."

Welfare benefits:
Will be focused on those most in need.  From next year benefits (excluding state pensions), tax credits and public section pensions will be rated in line with CPI not RPI.  Families earning up to £83k pa are currently entitled to tax credits - will be changed.

Child benefit will not be taxed or means-tested but it will be frozen for the next 3yrs.

Disability Living Allowance will not be reduced but a medical assessment will be introduced from 2013.  It will be a simpler process.

Housing benefit - some families receive £104k pa in housing benefit.  The system will be drastically overhauled.

Osborne: "Today we have paid the debt for a failed past.  Prosperity for all, that is our goal."

Full text of Osborne's speech

Information overload and .pdfs galore from HM Treasury

Strident Hattie is now in full sail, shouting about "the same old Tories".  Her speech is so predictable and hackneyed that it could have been written before she even had sight of the budget.

Chris Bryant raised a Point of Order related to leaking of budget details to the press and asked for it to be referred to the Committee of Standards & Privileges.

Videos to follow.

UPDATE:  This video from Sky is the best I can find at the moment:


  1. GV,

    "The country has been over-spending; it has not been over-taxed"

    should read "...not been under-taxed".

    Otherwise, good summary.

    Is it just me or does Harperson have a really, really, really irritating voice?


  2. Oh yes, thanks Cap'n - just testing :-)

    No, it's not just you - she's awful and she always says the same old things. She's intending to stay on as Deputy so she'll be all over our screens for a few years to come - unless there's an internal coup!

  3. GV I smell a massive dose of inflation coming. Let that do its work and they'll have cut public sector pay and benefits by 20% or more in 2 years. Also what happens if the earnings link is negative, just where are all these high paying jobs going to come from to keep the earnings link boosting along? By the time the screaming and yelling has died down we won't be able to by a bacon butty in Bangkok!

  4. Do you mean the earnings link to state pensions, Incoming? Sorry, it's been a long day. If you do, Osborne said the link would be 'triple-locked' and would rise by 2.5% each year.

    It seems to have been quite well received - markets reacted favourably. From what I've read we'd be lucky to avoid inflation or a double-dipper whichever govt is in.

    I'd settle for a bacon butty in Barnet at the moment :-)

  5. GV there is so much liquidity hidden out in the markets and the dark pols that the very real danger of hyperinflation exists. However the real change is that UKplc has nothing to trade, we are now a dumb economy. If we want something from people who know how to make stuff, real stuff, then it'll cost us an arm and a leg. That reality is to be hidden from us though.

    Barnet, best bacon butties I know of are the cafe where the tour buses do pick ups near the Old Bull theatre dance school. Mind you I do a fantastic 23rd century sandwich!!! State of the art. :-)

  6. I'm a realist and pragmatist when it comes to govt - I think the only truth Cameron has ever spoken is that the we as a country are heading to the same destination via a different route to Brown/Blair's Labour govt.

    I've done some more reading since your last comment & inflation is regarded as a definite possibility, mainly as a result of the Vat hike.

    The Old Bull? that takes me back a few years - is it still standing? I'll pop over to your place later and check out that futuristic sandwich!


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