George Osborne Unveils “tough but fair” Budget
22 Jun
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As was expected George Osborne‘s first budget as Chancellor was not an easy pill to swallow. Few would envy Osborne’s task of cutting spending and increasing VAT whilst still trying to maintain some sort of popularity amongst voters. It was clear that some difficult decisions would need to be made in order to attempt to steer the country towards profitability once again. Mr Osbourne had stated that his budget would be ‘tough but fair’ although some thought that that might mean unfairly tough on some.
What is most clear is that we need to improve the state of the economy in a fast yet sustainable way. Corporations are turning to their treasury management systems and finding that they don’t have enough funds to support the growth they need to achieve. Individuals are finding that they are unable to save and afraid to spend.
The Chancellor has suggested that he will be able to cut borrowing from 10% of GDP to 1% within 5 years. The following measures where introduced in today’s budget:
1. VAT will rise from 17.5% to 20% in January 2011.
2. Duty on Alcohol, cigarettes and fuel will not rise.
3. Child benefits will be fixed for three years. Tax credits and housing benefits will be reduced.
4. Public sector worker earning over £21,000 will have their pay frozen.
All full list of changes can be found on the BBC’s Budget page.
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I am at a loss as to why books and newspapers are exempt from VAT. Why don’t we scrap the ‘tax disc’ and simply increase the duty on petrol and related products (its also fairer that way to those who only drive their Toyota Aygos and such like for 2,000 a year). What was the point of the CTF?