Thursday, 23 April 2009

Some thoughts on the Budget

I'm not going to write a lot about yesterday's budget because apart from anything else I've not really looked at the detail but there are one or two random thoughts I want to record. So here goes:
  • Bearing in mind that Gordon Brown was Chancellor for the first ten years of the 'New Labour' administration and that he is a control freak I can't help thinking that he had a lot of input into this budget. Sure much of it is Alistair Darling's work but because of Brown's previous position I think he, Brown, will have had his fingerprints on some of the decisions.
  • The Budget predictions for a rapid return to growth have certainly raised a few eyebrows. When one remembers the simply colossal revision that has had to be made by Darling of his figures in the pre-budget report, projections only five months old, then it is easy to see why nobody is giving the latest figures any credence. I would like to share Darling's optimism but can't; of course if the recovery is slower than he anticipates then there will be more borrowing / more tax hikes / cuts in spending.
  • One of the cleverest taxes that Gordon Brown brought in - it was some years ago now but I can't remember just when - was a 5% tax on insurance premiums. I have a feeling that quite a few people may not even register the fact that it exists. It surprises me that no attempt was made to increase the rate yesterday (or perhaps it has been for all I know) because this is a tax that is relatively painless and as so many people pay for their insurances on a monthly basis it is one of those government sources of income that comes in on a very regular basis.
  • Car scrapping scheme. Instinctively I dislike this idea. One country that has been mentioned having a similar scheme (apparently successful) is Germany. First thing to note is that we are not Germany, it is always dangerous to assume that what works in one country can be applied to another. Briefly then if one has owned a 10 year old car in the UK for at least a year it will be possible to have that car scrapped and then purchase a new car at £2000 off its purchase price. Of this £2000 half will be stumped up by the government, you and me in other words, whilst the other £1000 will come from the motor industry. I think that the Treasury have earmarked enough money for 300,000 new cars to be bought using this scheme. Now I don't know about other parts of the country but in Cornwall I can't imagine very many people being able to go from a 10 year old 'banger' to a brand new car even with this £2000 discount. It's the supposed environmental plus of having a new car that really gets to me though. Yes of course technology has moved on and we now have 'greener' cars but no mention is ever made of the environmental cost of making a new car which is much greater than that of the repairs / servicing of the older model. It seems so wrong to me to remove a serviceable but elderly car from the roads just to appease the motor industry. I do have my doubts about the practicalities of the scheme and will be very interested in seeing the extent of any take up.

No comments: