Gavin Maclure's Musings

My take on politics locally, nationally and internationally

Osborne helps savers in Budget

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Chancellor George Osborne and his Treasury team outside Number 11 Downing Street before he delivered his fifth Budget today

Chancellor George Osborne and his Treasury team outside Number 11 Downing Street before he delivered his fifth Budget today

First up, I’m sorry for not blogging for over three weeks. I have recently had a big change in my life as I moved away from Ipswich, where I had lived and worked (in business and politics) for nearly thirteen years, to Chelmsford in Essex. It was sad to leave Ipswich but it was time for a change and since stepping down from active politics as a local councillor and Tory activist the opportunity was there to open a new chapter in my life.

But (unfortunately for some I am sure!) you won’t stop hearing from me in the electronic world as I will continue blogging on politics, mainly nationally and internationally until, perhaps, I feel the need to comment on the shenanigans of local politicians in the county town city of Essex.

So here goes with another post..

George Osborne has today announced his fifth budget for UK plc, with key headlines for me being the increase in the income tax threshold to £10,500 (delayed until next year) and the big one: increasing the ISA allowance (in either cash or shares) to £15,000 from July this year. This is great news for everyone (as all are entitled to earn up to £10,500 without paying income tax) and savers, who have suffered far too long since the banks and the Labour Party wrecked the economy in 2008.

It was interesting to see two MPs who I personally know – and have campaigned for – standing on the doorstep of Number 11 next to George Osborne at the customary photo op when the Chancellor of the Exchequer holds up the red box before driving off to the Commons to deliver his budget. Both Nicky Morgan (Con, Loughborough), who is Economic Secretary to the Treasury, and Rob Wilson (Con, Reading East), who is the Parliamentary Private Secretary to the Chancellor, were in Downing Street with Mr Osborne for the group shot of the Chancellor’s team before he took centre stage.

We had the announcement at the front-end of the income tax system on the personal allowance but Mr Osborne also told us the higher rate tax threshold will rise from £41,450 to £41,865 next month and by a further 1% to £42,285 next year. Not a lot but it will help the 1.4 million (since 2010 alone) who are, frankly, on modest incomes (especially if they are the only breadwinner) but have been dragged into the 40% bracket. Let’s not forget the LOWERING of the 40% threshold was a deliberate Coalition Government policy since 2010 to pay for the increase in the personal income tax allowance. So all in all higher rate taxpayers are still losing out – some (in fact most) will say “so what?”, as the majority do not earn enough to pay 40%, but I remind you hundreds of thousands earn just over the threshold and their increase in salary due to a promotion is then swallowed up by HM Treasury – hardly fair.

I’m no where near about to retire and won’t be able to afford to do for many decades thanks to the out-of-control housing market and Gordon Brown’s raid on pensions back in 1997 when he removed the tax relief available to pension funds. But I am pleased George Osborne has started to recognise the huge problems being stored up for those on defined contribution pensions, which, if they have a pension at all, nearly everyone in the median working age group (i.e. my Generation) has rather than the gold-plated salary pension schemes (also known as defined benefit) my parents’ generation enjoy. I won’t begin to try and understand the detail (not yet anyway) but the Chancellor has removed tax restrictions, meaning defined contribution pension holders won’t need to buy an annuity if they do not wish to, and the taxable part of pension pot taken as cash on retirement is to be charged at normal income tax rate, down from 55%.

Straight after the budget, Sky News went to Wakefield to interview two local businessmen (and yes, they were men!). Both interviewees were positive about the chancellor’s announcement with the key word “confidence” being used. Most ordinary workers are yet to feel the benefits of the economic fixes the Conservative-led Government is putting in place to rectify the monumental mess the Labour Party, of which Ed Miliband and Ed Balls were very senior members, left the country in 2010. But I sense a warming amongst the electorate towards the Conservatives when it comes to the economy, which will be THE most important aspect of the General Election in 2015. “It’s the economy, stupid”, as Bill Clinton said.

However, David Cameron’s Conservatives have an uphill struggle if they are to actually win a general election for the first time since 1992! The constituency boundaries are skewered in Labour’s favour, thanks to the cry-baby antics of the Liberal Democrats when they weren’t given Lords Reform (something not mandatory in the Coalition Agreement although boundary changes were if Nick Clegg’s party got their referendum on the Alternative Vote system, which they did) and the general feel in the country that the Tories are still the party of the rich, which Labour leader Ed Miliband focused on again today during his budget response in the House of Commons. The surge of UKIP, to be boosted further when they may indeed win the European Elections in May, will also be a major factor on whether Mr Miliband takes the keys to 10 Downing Street or not. The yellow peril for all their puffed out chests in government (despite losing seats in the 2010 election), are an irrelevance.

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Author: gavinmaclure

IT professional; political blogger, former Conservative councillor

One thought on “Osborne helps savers in Budget

  1. With the Labour lead down to 1% and UKIP now in third place for the EU leaflet, are you so confident that we won’t see a Tory victory in 2015? I’m not.

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