Thursday, 17 March 2016

The big snooze?

What was it like for you?  The 2016 Budget that is.  Earth shattering? A bit of a damp squid?  Well, it all depends on your perspective.  This morning, I'm picking out a couple of my highlights.

For the punter in the street the normal trigger points of beer, wine and whisky taxes were stroked, some positively, some negatively but overall nothing excessive.  Oh, apart from the fuel duty which will please everyone, drivers and business alike.

For the savers, and we know that pensions is a long-standing time-bomb that no Chancellor has managed to defuse, the life-time ISAs to encourage savings might please the IFAs and their kin.  Although I'm concerned about abolishing the Money Advice Service, that's supported a mountain of vulnerable individuals with their finances.  Which leads me on to...

For the public sector and those who rely on their services, the dire forecasts of savage budget cuts and more of the same?  Well they're only just starting to hit from the last lot and now there's more to come, although quite what they will be...      

The sugar tax.  Ah yes, the sugar tax.  Nice headlines from that.  Although we've got another few years to rot our teeth and increase the diabetes risk before that's put in place.  It's not an eye-opener though, most in the industry were accepting this would be coming down the line some time soon and so would already be putting their strategies in place.

Likewise investment in the infrastructure.  That will be a welcome boost to our industries, particularly in relation to road and rail, yet these are long, long-term plans, dependent on the political machinations of times to come, and so won't have an immediate effect on the economy.

Turning all schools into academies - for those in education, again the tide's been running that way for a number of years so it's no surprise.

Now for the smaller businesses, the small engines of entrepreneurship that keep our economy ticking over.  They're the biggest winners of the lot with rate relief, the major conurbations being able to retain their business rates for local investment, increased promise of reductions in corporation tax and abolishing of the Insurance Class 2 stamp.  It's a dodgy wicket though, with Osborne relying on income from the blue chips to help pay for it.

Will it mean big changes in how you run your business?  With the OBR downgrading the economic forecast, and 'those in the know' saying the country's productivity growth is permanently damaged, for SME's probably not.  For the big boys?  Well that's different, with the Chancellor's stated intent to chase them down for tax avoidance (although he's tried to do that before with little success) they will be looking again at their strategies and see if what they are already doing will fit, or whether they need to consider something anew.

And finally, for the economy as a whole? Well unless there's public confidence in the country's stability, belief by the individual that they've got secure employment, or that their zero contracts or minimal wage or compensatory benefits are not going to be cut, cut and cut again, no-one will be spending any money.  And that, that my friends, is the biggest risk of all. 

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