Budget 2015 Discussion

First Tory budget in 16 years or something like that, summary from the Beeb below:

Personal taxation and pay

Introduction of a new national living wage for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 - giving an estimated 2.5 million people an average £5,000 rise over five years

Low Pay Commission to advice on future changes to rate

Inheritance tax threshold will be increased to £1m from 2017

Personal allowance, at which people start paying tax, to rise to £11,000 next year

The point at which people start paying income tax at 40p to rise from £42,385 to £43,000 next year

Mortgage interest relief for buy-to-let homebuyers to be restricted to basic rate of income tax

Welfare and pensions

Tax credits and Universal Credit to be restricted to two children, affecting those born after April 2017.

Income threshold for tax credits to be reduced from £6,420 to £3,850

Working-age benefits to be frozen for four years - including tax credits and local housing allowance, but maternity pay and disability benefits exempted

Rents in social housing sector will be reduced by 1% a year for the next four years

Higher-income households in social housing will be required to pay rents at the market rate

Disability benefits will not be taxed or means-tested while state pension triple lock to be protected

18-21-year-olds will not be entitled to claim housing benefit automatically, with a new "earn to learn" obligation

Employment and Support Allowance payments for claimants deemed able to work to be "aligned" with Jobseeker's Allowance for new claimants

Green Paper published on proposals for "a radical change" to pension saving system

Annual tax relief on pension contributions to be limited to £10,000 a year

The state of the economy

Economy grew by 3% in 2014

2.4% growth forecast in 2015, 0.1% lower than predicted in March, followed by 2.3% and 2.4% in the two following years

One million extra jobs predicted to be created by 2020

Public borrowing/deficit/spending

Deficit to be cut at same pace as during last Parliament - securing a budget surplus a year later than planned in 2019-20

Borrowing set to fall from £69.5bn this year to £43.1bn, £24.3bn and £6bn before hitting a £10bn surplus in 2019-20

Debt as a share of GDP to fall from 80.3% this year to 79.1%, 77.2%, 74.7%, 71.5% and 68.5% in successive years

1% public sector pay rise to continue for next four years

£37bn of further spending cuts by 2020, including £12bn of welfare cuts and £5bn from tax avoidance

Alcohol, tobacco, gambling and fuel

No rise in fuel duty with rates continuing to be frozen

Major reform to vehicle excise duties to pay for a new road-building and maintenance fund in England

New VED bands for new cars to be introduced from 2017, pegged to emissions - 95% of car owners will pay £140 a year

Alcohol and tobacco duties not mentioned in statement

Business

Corporation tax to be cut to 19% in 2017 and 18% in 2020

Permanent non-dom status to be abolished - from April 2017, anyone who has lived in the UK for 15 of the past 20 years will pay same level of tax as other UK citizens

£7.2bn to be raised from clampdown on tax avoidance and tax evasion with HMRC budget increased by £750m

Bank levy rate to be gradually reduced over the next six years and a new 8% surcharge on bank profits introduced from January 2016

Cap on charges imposed by claims management companies and an increase in insurance premium tax to 9.5% from November

New apprenticeship levy for large employers

Climate Change Levy exemption for renewable electricity to be removed.

National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016

Dividend tax credit to be replaced with a new tax-free allowance of £5,000 on dividend income. Rates of dividend tax to be set at 7.5%, 32.5% and 38.1%.

Health and education

NHS will receive a further £8bn by 2020 (in addition to the £2bn already announced)

Student maintenance grants to be replaced with loans from 2016-17, to be paid back once people earn more than £21,000 a year

The maintenance loan will increase to £8,200

New university professorships to be created to mark the Queen's 90th birthday

Housing/infrastructure/transport/regions

Control over fire services, planning and children's services to be handed to consortium of 10 councils in Greater Manchester

Discussions on devolution of services to Sheffield, Liverpool and West Yorkshire

£30m for new body to promote integrated transport - including use of Oyster cards - in the north of England

Rent-a-room relief scheme to rise to £7,500

Defence

Government to spend 2% of GDP on defence every year, meeting Nato target

Spending on defence to rise in real terms every year during the Parliament

New £1.5bn Joint Security Fund to be created

Measures announced before Budget

The cost of funding free TV licences for the over-75s will be transferred from the government to the BBC between 2018 and 2021

The annual household benefit cap will be reduced to £23,000 in London and to a lower level in the rest of Britain.

Subsidies for social housing will be phased out with local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - having to pay up to the market rent

A consultation will take place on changing Sunday trading laws

Recipients of the Victoria Cross and George Cross will see annual pension annuities rise from £2,129 to £10,000, paid for by bank fines

-----------------------------------

Personally I haven't been able to get passed the attack on BTL investors, surely a core Tory voter pool, which seems absured. Crossing my fingers for a U-turn on that one......!!

Others' thoughts?

I haven't actually seen anything in the budget that effects me to be honest

Everyone seems to be having a good old whinge on my social media though

As long as the price of booze stays where it is I'm happy

LOL

I'm actually writing a letter to George Osbourne on this. I didn't vote for a Labour budget and he's attacking his core voter pool. Have a few signatories already. Doubt it will do any good mind....

Definitely agree with putting the responsibility of wages onto the employer and away from the tax credit system. A system that they expected to cost £1bn a year costing 20. Still don't know how £7.20 is a living wage really.

Don't agree with relief for buy to let really. House prices are inflated enough already.

Personal allowance rise is always a nice sweetener.

It's not really 'relief' though. At the moment you pay tax of your profit after costs.

The changes mean PRS landlord businesses get to continue doing the same, but private individuals get totally screwed. Given the 'mom & pop' private investors make up the majority of the housing supply in the PRS sector, the actual result of this will be investors will only buy (and therefore supply) the cheapest & nastiest flats and are totally disincentivised to repair or improve them so tenants will be worse off.

Terribly thought through policy.

Anything that slows the pace of property as an investment sounds alright. Haven't looked in detail at the policy though.

It screws those that have worked hard, saved hard and invested their earnings sensibly. And combines with attacks on pensions for high earners. None of this will get the credit with the liberal left which it deserves.

It will also lead to massive increases in tax avoidance schemes.

Disasterous policy for a Tory government.

People that work hard ??

Just another phrase....

I imagine working in McDonald's is harder than both our jobs...and we earn quite a bit more..

All this people that work hard bollox..

Agree with you Truss, everybody works hard but in different jobs. Think the housing problem needs sorting properly, rents going up while assistance goes down is going to help nobody. The rest of it isn't too bad but we'll see later down the line.

I'm worried about the family man with two kids who earns a modest £25,000.....Derby.

Apparently they are going to to be £200 a month worse off....and it is the Telegraph reporting that !!.

It's a typical "After we've won the election budget"..........Put the hurt in now and then have voter-friendly budgets closer to when it matters...

Osbourne is very savvy he is the consummate politician I'll give him credit for that !!.....

To me though however he doesn't see real people put dots that vote !!.

Unfortunately he doesn't seem to realise he's playing with peoples lives...

Well the budget was more than enough to floor the odious Harriet Harman, who blathered and stumbled through her (poorly-prepared) speech, so that was a positive.

Raising the tax threshold, good idea (a UKIP policy, if I remember rightly!).
Tax credits restricted to two children, excellent idea.
18-21 years can't claim housing benefit automatically, very nice.
The onus is on the BBC to fund the license for over-75s, well done, but no move to reduce it is rather poor.

Other than that, getting rid of maintenance grants is an incredibly poor idea; very restrictive for social mobility.
More devolution being talked about is a shame for our already over-bureaucratic nation.
Budget surplus pushed back...again! No surprise.
A million extra jobs predicted to be created by 2020 - nowhere near good enough since the population will increase by over that in five years.
National living wage - a headline grabber, but is it really a great accomplishment?
No cuts to foreign aid, as expected, but that's where you can make real savings. And scrapping HS2 would be sound.

How do you prepare for a budget speech when you don't know what's in it ??

You're so tribal...It's hard to take you seriously..

Most of what was in the budget was known about beforehand, Truss!

With the exception of the national living wage, of course, but I believe Harriet Harman chose to ignore that altogether.

I've put my stats through the Beeb budget calculator and I'm £300 a year better off so can't complain.

My main bone of contention is getting rid of the Maintenance Grants. I was lucky enough to qualify for them when I went to University, and I dread to think how large my already sizable debt would be without them. Definitely would have made me think twice about going to Uni, knowing I would be owing almost double what I do now. It will definitely put people off, and that is a shame for those with genuine ability.

It's the same for everyone. The problem is with the level of tuition fees. There are plenty of people with parents who are well enough off that they don't get grants yet don't get handouts from their parents. You only pay it back when you can afford to.

It's an expense we don't need, and we don't need more incentives for higher education, degrees are already devalued. Every taxi driver and call centre worker has a degree.

There are also plenty of people who are well off, who just go to Uni for the sake of it and get a poor degree who are put through it entirely by their parents. This is who should be deterred from going, not people who simply can't afford it. And I also believe that they announced a potential to raise Tuition Fees again, whilst capping the limit you start to pay back at £21,000?

The majority of people that go are no more able to afford it than those on grants. It's their parents money it's based on, not theirs. I worked summer jobs to pay for living, and other costs are only relevant once your earning, not a barrier to entry.

TRUSSMAN66 wrote:How do you prepare for a budget speech when you don't know what's in it ??

You're so tribal...It's hard to take you seriously..

It gets shared the night before, from memory.

Hero wrote:I've put my stats through the Beeb budget calculator and I'm £300 a year better off so can't complain.

Looked at that. The caculator is utter BS as it only asks for a couple of simplistic metrics.

So it says I'm a hundred quid or so better off, when in reality I'm thousands worse off.

JDizzle wrote:There are also plenty of people who are well off, who just go to Uni for the sake of it and get a poor degree who are put through it entirely by their parents. This is who should be deterred from going, not people who simply can't afford it. And I also believe that they announced a potential to raise Tuition Fees again, whilst capping the limit you start to pay back at £21,000?

That's called life. Get over it. Can't spend all your time whinging about those better off than you.

TopHat24/7 wrote:

TRUSSMAN66 wrote:How do you prepare for a budget speech when you don't know what's in it ??

You're so tribal...It's hard to take you seriously..

It gets shared the night before, from memory.

It doesn't..........I remember when Brown through a curve ball on non doms at Cameron and also surprised with the 10p on tax thing that came back to haunt him....

That's why it usually takes the leader of the opposition 5/10 minutes sitting down with his/her shadow chancellor to sort it all out...before they respond.

I think this was a very clever budget politically by Osbourne. He took the wind out of Labour's sails by adopting two of their flagship financial policies (increasing minimum wage and new non dom rules). The pace which he is reducing the budget is in line with what Ed Balls planned as Shadow Chancellor.

From a personal perspective, I agree with the reduction of some of the benefits, such as limiting child benefit to the first two children, and stopping people who earn over £30k a year getting subsidised rent on Housing association properties.

I also agree with shifting the cost of paying the lower paid from the state to private companies, as done by the lowering of corporation tax, increasing minimum wage.

I think young people have been disproportionately harmed by the budget. The removal of the maintenance grant won't save a great deal of money, and may put off some people from going to university, thus stopping social mobility. I can't understand why 25 is the age the new minimum wage will be paid at. 21 made sense, as you are encouraging brighter youngsters to pursue education, rather than a wage.

I also think limiting public sector pay rises to 1% for another four years (seven in total), is a slap in the face for those workers. As the total wage bill can only go up by 1% there's a chance that workers who earn more than minimum wage will be hit. workers on minimum wage will need >1% wage increases in line with the new minimum wage. So workers who earn say £18,000 may have to cop for less than 1% increases to keep the paybill in line.

TopHat24/7 wrote:

JDizzle wrote:There are also plenty of people who are well off, who just go to Uni for the sake of it and get a poor degree who are put through it entirely by their parents. This is who should be deterred from going, not people who simply can't afford it. And I also believe that they announced a potential to raise Tuition Fees again, whilst capping the limit you start to pay back at £21,000?

That's called life. Get over it. Can't spend all your time whinging about those better off than you.

I worked my ass off to get into a good uni, get a good degree and (hopefully) get a better paid job in the future. Just think some people might be deterred from doing the same by these changes, which would be a shame.

The government is spending much more than they earn every year, with a huge debt. Wherever cuts are made, they wont be popular.

Other people work their ass off from leaving school, and spend all of that time paying tax. Surely people who are into their twenties without ever paying tax, and are now earning a reasonable salary are well placed to contribute.

The universal credit thing was a great idea. Earn more and keep a portion of your benefits until you make the last step past the threshold - so at no point do you lose out by working - aspirational. Seems as if he's taken with both hands after giving with one. Also the BTL thing has bummed his core vote and nicking the two Labour policies - hes gone for kicking an already crippled labour at the expense of his own?. Can't get my head around it.

JDizzle wrote:

TopHat24/7 wrote:

JDizzle wrote:There are also plenty of people who are well off, who just go to Uni for the sake of it and get a poor degree who are put through it entirely by their parents. This is who should be deterred from going, not people who simply can't afford it. And I also believe that they announced a potential to raise Tuition Fees again, whilst capping the limit you start to pay back at £21,000?

That's called life. Get over it. Can't spend all your time whinging about those better off than you.

I worked my ass off to get into a good uni, get a good degree and (hopefully) get a better paid job in the future. Just think some people might be deterred from doing the same by these changes, which would be a shame.

I don't think so mate. You can't beat having a good degree. I got a 2:1 somehow....I think my Father-in-law paid off the examiners....

Unfortunately people equate education with intelligence...(I know they do where I work because there are plenty of morons) and the two don't always follow hand in hand....

Always encourage anybody to get a degree and I don't think that will ever change..

Depends what the degree is in my opinion. That 1 percent pay rise is a pisser as no pay rises for me really for the next 4 years, means i'm near enough spending 8 months of the year away from the family to do nothing but pay a mortgage. Benefits here I come

JDizzle wrote:

TopHat24/7 wrote:

JDizzle wrote:There are also plenty of people who are well off, who just go to Uni for the sake of it and get a poor degree who are put through it entirely by their parents. This is who should be deterred from going, not people who simply can't afford it. And I also believe that they announced a potential to raise Tuition Fees again, whilst capping the limit you start to pay back at £21,000?

That's called life. Get over it. Can't spend all your time whinging about those better off than you.

I worked my ass off to get into a good uni, get a good degree and (hopefully) get a better paid job in the future. Just think some people might be deterred from doing the same by these changes, which would be a shame.

Which is great. Me too (no private education or minted folks etc). But people shouldn't be focussing on rich kids being able to take Uni frivolously any more than they should rich kids driving nicer cars. It's an irrelevant distraction. The point is, with higher fees those rich kids are paying for their wasted higher education rather than the binman or taxi driver paying for it via heavily tax-payer subsidised low fees.

Those that cannot afford it need to make the choice of whether University is really right for them and will allow them to earn the £££ to pay back the loans required or whether they should do something else.

It was lower-middle income kids being cheated by Labour that was the problem, being told that any old degree from any old Uni would make them minted and encouraged in with low fees. That then came our with all aspirations and no actual hope of success. That was the tragedy, not some silly toff getting a dougie.

TRUSSMAN66 wrote:

JDizzle wrote:

TopHat24/7 wrote:

JDizzle wrote:There are also plenty of people who are well off, who just go to Uni for the sake of it and get a poor degree who are put through it entirely by their parents. This is who should be deterred from going, not people who simply can't afford it. And I also believe that they announced a potential to raise Tuition Fees again, whilst capping the limit you start to pay back at £21,000?

That's called life. Get over it. Can't spend all your time whinging about those better off than you.

I worked my ass off to get into a good uni, get a good degree and (hopefully) get a better paid job in the future. Just think some people might be deterred from doing the same by these changes, which would be a shame.

Always encourage anybody to get a degree and I don't think that will ever change..

Classic Labour.

I'd always encourage someone to get a degree. The loans are also a funny number when you have them hanging over you. I mean, I dont even consider it money. The world is far more opened up with a degree.

Dolphin Ziggler wrote:I'd always encourage someone to get a degree. The loans are also a funny number when you have them hanging over you. I mean, I dont even consider it money. The world is far more opened up with a degree.

The job market becomes a smaller place without one.....

I think they are overrated........Drive, commonsense and charisma for me are underrated.....

But I'm probably in the minority..

I'm again better off and have found that it's young parents who are complaining the most, I can accept that not every pregnancy is planned but the moment those with multiple children start complaining well they only have themselves to blame. If you can't afford to raise a child then don't get pregnant, it borders on the irresponsible and scrounging when those people have two or three children.

My wife and I purposefully waited until we were in a position to raise a child without having to worry about money before she fell pregnant with our daughter. I have no sympathy for irresponsible parents who end up relying on responsible parents to bail them out.

Dolph, i'd encourage anybody to get a proper degree but a multitude of my friends went to university for a good time rather than to further their lives, if a hike in fees deters those people then I don't see an issue with it.

I went to university for a good time, as well as knowing that the world is far more opened up by it (and a sense of intrigue dragged me there too). Even meaningless jobs. I got a job in recruitment because of my degree, a degree which had absolutely no relevance. Unless you have a sense of purpose I would suggest university. The hike in fees has been drastic, but they will likely remain unpaid in life unless you do really well, at which point the degree was obviously important enough to have paid for itself.

I have a problem with those people who will never repay the fees, you should have to start repaying the moment you graduate none of this over £21k a year garbage, if you want a degree you should pay for it.

I agree with a lot of what you say Hammer about irresponsible parents......I see exactly where you are coming from...

But unfortunately it's the kids that suffer If we go too hardline....

I want to live in a compassionate society....

TopHat24/7 wrote:

JDizzle wrote:

TopHat24/7 wrote:

JDizzle wrote:There are also plenty of people who are well off, who just go to Uni for the sake of it and get a poor degree who are put through it entirely by their parents. This is who should be deterred from going, not people who simply can't afford it. And I also believe that they announced a potential to raise Tuition Fees again, whilst capping the limit you start to pay back at £21,000?

That's called life. Get over it. Can't spend all your time whinging about those better off than you.

I worked my ass off to get into a good uni, get a good degree and (hopefully) get a better paid job in the future. Just think some people might be deterred from doing the same by these changes, which would be a shame.

Which is great. Me too (no private education or minted folks etc).  But people shouldn't be focussing on rich kids being able to take Uni frivolously any more than they should rich kids driving nicer cars.  It's an irrelevant distraction.  The point is, with higher fees those rich kids are paying for their wasted higher education rather than the binman or taxi driver paying for it via heavily tax-payer subsidised low fees.

Those that cannot afford it need to make the choice of whether University is really right for them and will allow them to earn the £££ to pay back the loans required or whether they should do something else.

It was lower-middle income kids being cheated by Labour that was the problem, being told that any old degree from any old Uni would make them minted and encouraged in with low fees. That then came our with all aspirations and no actual hope of success. That was the tragedy, not some silly toff getting a dougie.

I'd agree with the point that there are too many people going to Uni, and that's the flaw in the system that needs fixing. Whether this is possible now the genie is out of the bottle is another matter entirely. But I just don't like it the way he's gone in this budget, in that it's essentially less privileged people who will suffer and miss out (some who shouldn't be going, some who should).

TRUSSMAN66 wrote:I agree with a lot of what you say Hammer about irresponsible parents......I see exactly where you are coming from...

But unfortunately it's the kids that suffer If we go too hardline....

I want to live in a compassionate society....

Doesn't matter Truss, if their parents are irresponsible enough to have children they can't afford the toddler deserves to starve or catch scurvy.

It's very rarely that the child suffers, rather the parent has less money to spend on new clothes or doing up a brand new car, I have very little compassion and disagree strongly with the benefit system anyway.

Hammersmith harrier wrote:I have very little compassion .

Cheers for clarifying that for me.

LOL Out Loud

Hammersmith harrier wrote:It's very rarely that the child suffers, rather the parent has less money to spend on new clothes or doing up a brand new car, I have very little compassion and disagree strongly with the benefit system anyway.

Sadly, that just isnt true. As I know from the kids my girlfriend works with whose parents never struggle to feed their 40 a day habit, but the kids do go without the odd dinner, and never get new shoes. In fact, these parents were tight on money so told their 9 year old child that he was wrong about what day his birthday was on and delayed it for two weeks.

Hammersmith harrier wrote:I have a problem with those people who will never repay the fees, you should have to start repaying the moment you graduate none of this over £21k a year garbage, if you want a degree you should pay for it.

Its about the betterment of education and the gains that has for this country. Need to go back to when these things were introduced.

Dolphin Ziggler wrote:

Hammersmith harrier wrote:It's very rarely that the child suffers, rather the parent has less money to spend on new clothes or doing up a brand new car, I have very little compassion and disagree strongly with the benefit system anyway.

Sadly, that just isnt true. As I know from the kids my girlfriend works with whose parents never struggle to feed their 40 a day habit, but the kids do go without the odd dinner, and never get new shoes. In fact, these parents were tight on money so told their 9 year old child that he was wrong about what day his birthday was on and delayed it for two weeks.

Sadly from my experiences Dolph it is true in part, granted you do have those that struggle and they are the ones who do need help but at the same time you get single parents who survive off the state and do live a life of luxury.

Thread. Of. The. Year.

Yep

Derbymanc wrote:Depends what the degree is in my opinion. That 1 percent pay rise is a pisser as no pay rises for me really for the next 4 years, means i'm near enough spending 8 months of the year away from the family to do nothing but pay a mortgage. Benefits here I come

You know there are jobs in the private sector? Could always go there if you're not happy with your pay.

Scottrf wrote:

Derbymanc wrote:Depends what the degree is in my opinion. That 1 percent pay rise is a pisser as no pay rises for me really for the next 4 years, means i'm near enough spending 8 months of the year away from the family to do nothing but pay a mortgage. Benefits here I come

You know there are jobs in the private sector? Could always go there if you're not happy with your pay.

Why haven't any of the other 5.7 million public sector employees figured this out.

TopHat24/7 wrote:It's not really 'relief' though.  At the moment you pay tax of your profit after costs.

The changes mean PRS landlord businesses get to continue doing the same, but private individuals get totally screwed.  Given the 'mom & pop' private investors make up the majority of the housing supply in the PRS sector, the actual result of this will be investors will only buy (and therefore supply) the cheapest & nastiest flats and are totally disincentivised to repair or improve them so tenants will be worse off.

Terribly thought through policy.

Individuals struggling to afford to buy a house to live in don't get any tax relief - that was abolished a few decades ago.  Difficult to see why other individuals wanting to buy properties to let out should continue to be treated much more favourably for tax purposes - with the better off among that group currently receiving the most help, through tax relief at higher rate.

Hammersmith harrier wrote:

Dolphin Ziggler wrote:

Hammersmith harrier wrote:It's very rarely that the child suffers, rather the parent has less money to spend on new clothes or doing up a brand new car, I have very little compassion and disagree strongly with the benefit system anyway.

Sadly, that just isnt true. As I know from the kids my girlfriend works with whose parents never struggle to feed their 40 a day habit, but the kids do go without the odd dinner, and never get new shoes. In fact, these parents were tight on money so told their 9 year old child that he was wrong about what day his birthday was on and delayed it for two weeks.

Sadly from my experiences Dolph it is true in part, granted you do have those that struggle and they are the ones who do need help but at the same time you get single parents who survive off the state and do live a life of luxury.

Define "luxury"?