Tax has been a big talking point in recent years – we’ve had the sugar tax, the pasty tax, the plastic bag tax, and even the caravan tax. And locally, corporation tax long hogged the headlines. Some tax changes have been significant, others have been gimmicks. But the reality is that when it comes to dealing with the public finances, spending cuts rather than revenue-raising have been doing the heavy lifting. This dynamic though is about to change, and the contents of the recently launched party manifestos underline this. Continue reading
UK businesses appear in decent shape. Turnover is up as are Corporation Tax receipts. Yet sterling has lost roughly one-tenth of its value since June and that’s raising input costs and squeezing profits. A long summer of falling costs boosting profits is coming to an end. Continue reading
Lower growth forecasts meant the Chancellor had some tough choices to make in last week’s Budget. By pressing ahead with business and personal tax cuts now he chose to postpone a big chunk of austerity until the final year of this parliament. Austerity will have to be extended unless productivity and wages stage a dramatic recovery.
Today was George Osborne’s eighth Budget. Here are some of the key features.
Today George Osborne will deliver his eighth Budget. If you add in Autumn Statements and Spending Reviews, the current Chancellor has delivered thirteen fiscal events before he gets to his feet today. Horse racing enthusiasts would pour over these to assess the Chancellor’s fiscal form and make predictions on what we may expect to see. Continue reading
Underneath the Spending Review headlines was an old, but very important assumption – the UK gets more productive, and fast. Higher productivity means higher wages and thus tax receipts. There are signs of improvement but productivity has fallen short of expectations in recent years. (And Northern Ireland continues to lag the rest of the UK.) Will this time be different?
The Chancellor has developed something of a reputation for over-promising and under-delivering when it comes to fiscal austerity. He certainly didn’t shed this image today in the first all-Conservative Spending Review since the mid-1990s.
Delivering a Budget is as much to do with presentation as it is fiscal substance, and any good Chancellor will have an acute sense of how things are going to play with the media and electorate. This means having up their sleeve a raft of populist policies that will take the limelight away from some of the more unpalatable realities.
Yesterday’s Autumn Statement was no exception, with a disproportionate amount of attention being focused on politically-savvy but relatively insignificant measures such as the abolition of Air Passenger Duty for under-12s.