What’s Your Opinion About the Budget?

There was a palpable sense of adolescent schoolchildren during the Budget. The team here couldn’t quite fathom the petulant behaviour of adults. It didn’t help women’s causes that the three main characters seemed like characters from St Trinian’s, Grange Hill and Mean Girls. You can decide who was who.

The short version – nothing much happened. The Budget is often an exercise in shuffling the deck attempting to please the public who want more for less, the media who want sensationalism and the markets which want certainty. If we are honest the “greater good” should prioritise the planet, society and the economy in that order, but little is achieved without money, so the reverse generally holds.

A main problem that any Government has is that roughly 10% of all taxes ends up going towards servicing interest on loans the UK has received, (it’s now almost as much as the entire spend on education). This includes paying you your interest on your UK Government Bonds and Gilts or National Savings. As it is just the interest (not actually repaying the debt) market responses to a Budget can increase this considerably.

I’m not sure that I can really comment on the Budget without getting ‘political’, but … I think it’s a pity that:

• Young people attempting to buy a home were not given any good news
• The Landlord tax will likely only increase rents, which seems entirely counter-productive
• Tax relief on pensions could have been simplified to a single rate for all
• Working taxes are punishing work and are overly complicated. If you want to get people spending, raise the personal allowance and give it to everyone irrespective of income. I’d be bold with this
• NI needs to be sorted properly and with gumption, employers have seen enormous increases in staffing costs, which results in both inflation and reduced new hires as well as possibly redundancies. I don’t know what the solution is, but I think I would amalgamate it into income tax
• Small farms haven’t had any relief of note, these people feed us and look after the countryside and are being squeezed on their own margins. I think the £5m exemption would seem fairer
• There is about £11bn of uncollected corporation tax that is hidden offshore by multinationals. This can and should be collected
• I’m curious to know how EV mileage will be monitored
• We need to encourage entrepreneurs who take a risk to start a business and employ people in good jobs with good salaries which generate tax. So the cut in reliefs isn’t helpful
• Clearly tax simplification isn’t that simple

To me, tax is a bit like someone who plants a tree for future generations to sit in its shade, whilst never doing so themselves. It’s a price paid to the future.

I don’t pretend to have the answers and it is very easy to criticise a Government. I rewatched the disastrous Kwasi Kwarteng Budget of September 2022. I would imagine that most people would actually agree with his policies to reduce income taxes and welcome many of his proposals at the time, but we are beholden to the servicing of debt on the Bond market. All Chancellors are subject to the wisdom of Proverbs 22:7 “The borrower is a slave to the lender”.  [For your interest – it is generally believed that King Solomon wrote the Book of Proverbs.]

Anyway, perhaps you have some thoughts of your own?