The Budget

Who's seen the budget news?

http://www.bbc.co.uk/news/business-26517496

I must admit, I'm actually quite pleased with it. The income tax threshold is going up, fuel duty is not going up, beer duty is down, and it looks to my untrained eye as a few good things for the biddies.

Also, emergency services (voluntary ones like air ambulances and such) will be exempt from VAT on the fuel they use.

The cynic in me can't help but think there's a general election next year, but at the same time I think Mr Osborne has been making all the right noises.

Oh, and benefits for business too. Quite a few of them by the sounds of it. Business rates relief for some businesses, help with manufacturing and exports, reduction in corporation tax, and so many extra apprenticeship places.

Oh, and this:
http://www.bbc.co.uk/news/technology-26651179

Looks like he's finally cottoned on to the fact that rising from the ashes of British heavy industry, we are becoming world leaders in the IT sector (and take it from someone in the IT industry, we already are the best in the world, we're just much lower profile than our closest rival, the US).

 

It looks like certain people are getting very afraid of UKIP.

 

I think i'll wait to hear the other bits, give with one hand, take away with the other

 

Savings accounts pay more than ISAs, so an increasing the limit will only/most benefit a couple each earning over £10,000 p.a. Pensioners (earning over the tax threshold) with existing savings would have to slowly transfer them into ISAs to get future benefits.

Allowing people to take their pensions as cash will create a nice pre-election spending boom, make the 'pensions time bomb' worse and increase claims for pension age benefits in subsequent years. Whatever next, a government run scheme for equity release in order to try and get more money into the economy?

According to the tables I looked at this morning, the only people who appeared to be better off before inflation are couples over 65 with a joint income over £70,000 p.a. I'll be £200 p.a. worse off after inflation (assumed 2%).

I don't see what everbody's getting excited about. Even if you drink ten pints of beer a day you're only going to 'save' 70p/week from the budget, but will be about £3/week worse off overall after inflation on your beer spend alone.

 

No budget is going to be a lottery win, but I think this is as good as it gets.

In terms of direct effect on us ordinary folks, I agree there won't really be any. However it seems a lot of the budget is geared towards getting industry back on its feet. That creates jobs, and hope. I wouldn't mind betting that quite apart from the many thousands of people who are currently out of work due to the recession, there will also be many thousands more who are in jobs that they are not happy in, but daren't rock the boat because the market is a bit bleak. Giving industry a significant financial stimulus may just get things moving, so that people can find new jobs, and everything can start moving again.

 

Its no good getting industry moving if the wages arn't moving.
Most of any new jobs created will go to the influx of migrants as the wages will be unlivable for anyone based here.
Sorry, but we need a rise in interest rates, without that, we are going nowhere, no investment.
All the time they are looking for the spend, spend, spend approach, with no save, save.

The whole economy is out of balance.

 

I agree with bits of this, but I'm afraid I disagree with a lot of it too.

The wages are there, in some sectors. In my sector for example, IT, the wages on offer are now rising faster than inflation. There's a good reason for that. Our IT industry is growing fast, and we're now at a point where we can't actually find enough of the right people, so companies have to compete for them.

There is a reason why there is a shortage of the right people. I hate to say it, but it seems the latest generation of Brits are lazy arrogant gits.

Example. In the last 3 companies I've worked for, I've been part of several recruitment efforts trying to bring in enthusiastic young blood into the companies. It is staggeringly demoralising trying to recruit. On one hand, you get all the students ranting their political rants saying there are no jobs there, yet when we've posted jobs, including on the Universities' own websites, hardly anyone even applies. Of those that do, most of them either completely fail to demonstrate any relevant knowledge in their applications, or if they are invited to an interview, many don't bother to turn up, or turn up late. I even gave one applicant, who actually showed some enthusiasm, a full week to prepare for a simple test. I served it to him on a plate, even giving him full details in advance of the test. Yet when he came in to do it, he struggled, and after a quick chat he soon admitted that he hadn't even read the paper I'd sent him. Half the battle is with the Universities, who have been telling their students that a starting salary for a graduate programmer is upwards of £40k. It is not. That is senior developer sort of salary, so when you offer them market rates (which are still very good for someone with so little knowledge and experience that they will actually cost the company money for the first year or two, until they have enough experience to be actually useful), they turn their noses up at it.

In terms of heavy industry, its days are numbered, but Britain is actually very competitive in that sector, as is evident by the fact that several foreign companies set up here, even recently. They do this because although our wages are higher than elsewhere in Europe and beyond, we have the best and most experienced engineers here. But as I said, it can't last forever. Other countries are catching up, and some are ahead of us now. Britain currently excels in the IT industry, but that too is doomed unless we can get more people involved. That's why I'm pleased to see that the latest budget will fund the creation of the new Alan Turing Institute, to supplement other significant investments in the IT industry.

Up here in my neck of the woods, it has been recognised that we have a rapidly growing industry, and I'm pleased to see that the latest budget will support that. Two of our local airports are being upgraded, with a view to making it easier for the north east to work with the rest of the world. That's particularly important in my industry because Newcastle, Sunderland and most recently Middlesbrough have gone through major changes, with a shift towards cutting edge (and not run of the mill, actual cutting edge) IT, but we're also seeing growth in other industries up here too.

As for immigrants taking the jobs because the wages are too low for local folk, well all I can say to that is about two thirds of the applications I've seen have been from foreign students, and quite often many of them are asking for laughable salaries that are higher than senior salaries, and they expect that as their minimum starting salary. I saw one that asked for £70k. He had a degree from an Indian university, no commercial experience, and the skills he listed were considered out of date as much as 10 years ago.

 

Well the stock market didn't rise more after the budget

 

As a biddy contemplating how much my AVCs might be worth in terms of an annuity I'm intrigued by this particular hand out, though not sure if it's going to apply to me yet.

If I'm planning on living another 30 years I'd be best off leaving it as an annuity - I think- but otherwise I might be better off blowing it on a boob-job and endless holidays. At least I would have the satisfaction of knowing I was supporting the economy (In Thailand or the Seychelles).

It is scandalous that the general public have so little faith in the integrity of the financial advice market, that should have been sorted out by any government long since.

And yes, I think overall this will be a disaster for people's long-term pension prospects in general, although canny individuals will make it work in their favour. Won't it give carte blanche to future governments to wash their hands of indigent pensioners? We gave you control and you blew it - nothing to do with us?

 

I think it could have even further implications. How long before the DWP, Social Services, etc. take account of pension pots when assessing people for means tested benefits, arguing that's it's a financial asset (same as cash in bank, stocks & shares, etc,) and that they should use that up first before getting state handouts?

Otherwise, what's to stop people putting their 'savings' into their 'pensions' to make them untouchable by anybody other than themselves? Then if falling on hard times they could get the maximum benefits, and take cash out their savings account pension pot during good times or after retirement age.

 

What did I say about canny individuals? ;-)