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Some Surprises – But Not Many

The Budget this year was perhaps the most leaked ever: a far cry from the occasion when a Chancellor was sacked for blabbing Budget secrets.  Only the changes to allowances now being dubbed the ‘granny tax’ really provided much surprise which is perhaps why the journalists have fallen on them with such glee, though the detail may be less impressive than the headlines.

Overall, this was a neutral, steady as she goes, affair with much tinkering and re-announcements, and promises of more substantive stuff to come.  Those who compared this budget with the confusions and sleights of hand in Gordon Brown’s Budgets have some justification, although the Red Book is still a lot clearer than in his day.

And there was one announcement which pleased me very much.  As a Commissioner for the Public Services Trust 2020, I strongly argued for the benefits of tax transparency and that people should have a clearer explanation of how their taxes were used, particularly in relation to the services that they consume.  And the Chancellor has picked up this idea and is going to implement it.   This may seem a small step but bringing the scary and incomprehensible billions down to the scale of the tax payer themselves will give a much more informed and realistic debate about value for money.

I was also pleased, but without the frisson of surprise, at the reduction in the top tax rate.  Although 45p is still higher than in most other leading countries and is even higher when national insurance is taken into account, this is a step in the right direction for enterprise and even the tax take itself.  Having helped in garnering support and letter writing on the matter, it was nice that HMRC confirmed that not much tax is actually being raised by hiking top rates.

Of course, the cut is being balanced by rises in the tax on high value property which could bring to an end the surge in prices across central London, but the constraints on supply may be more effectively bolstering prices than the tax in denting them.

There is nothing wrong in a boring budget with no surprises in a time of uncertainty and wobbling growth.  The OBR has opined that government finances remain on track.  the balancing act between cuts and taxes may just be about right.

Bridget Rosewell

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