Budget open thread
George Osborne gives his first regular-season Budget speech today at 12.30. You can watch on BBC2, BBC Parliament or online at BBC Democracy Live.
We’ll have analysis for you once we have our hands on the Budget documents, and we’ll be tweeting throughout the speech @brightgrn.
In the meantime, this open thread is for you to give your verdict on the Budget during and after the speech, or to ask any questions you think BG’s illustrious readership might be able to answer.
The merging of NI and income tax would be something that a green government would consider doing.
For example there is a cap on NI contributions so that if you earn over a certain level you don’t have to pay any more NI on it. Essentially this means on the earnings of the top earners they are escaping a 12% tax that the low paid are paying. Take away that cap and you immediately net a large amount of contributions from the richest.
Whether Osborne would allow the richest to pay more tax through this move is another question.
“So what does everyone think of the changes to national insurance?”
It’s a kick in the pants for savers and pensioners – you don’t pay NI on savings, but you do pay tax.
It’s not clear exactly how plan to integrate the two but I’m not sure that it will affect savers or pensioners. From the budget documents:
“the Government will not extend NICs to individuals above State Pension Age or to other forms of income such as pensions, savings and dividends.”
I couldn’t watch the whole thing, but the cuts to corporation tax here are extraordinary. Similarly, the failure to spend any significant time on youth unemployment, or to even discuss a replacement to the EMA seem extraordinary to me.
On youth unemployment the budget says “Youth unemployment rose by 100,000 between 2004 and 2008, and has risen by a further 250,000 since the start of the recession. While participation in learning by 16 to 18 year olds has continued to rise, currently 9.4 per cent of all 16 to 24 year olds are unemployed and not in education.”
In response they’ll fund 80,000 ‘work experience’ places now and 50,000 appreticeships over 4 years. They’ll also fun 24 “University Technical Colleges” to provide technical training for 11-19 year olds in collaboration with universities, colleges and businesses. The curricula will be set by the sponsors. I don’t really know anything about these, though, so it’d be good if anyone who does could elaborate on what they are.
So what does everyone think of the changes to national insurance? The general response I’ve seen seems to be that by merging it with income tax people will be able to see more clearly how much they’re paying and so will demand lower taxes. But might they not see how regressive the system actually is when they realise that the higher rate isn’t actually much higher when you consider them both together? Might that lead to more support for changes to make the system more progressive? Or is that just wishful thinking? Will it have any effect on public opinion?
Much talk today about how reforms to business taxation might entice notorious tax dodgers like WPP back to the UK from their self-imposed exile in Switerland. But they will cost developing countries billions: