SUMMARY (Part 1)
A BUDGET FOR RE-ELECTION SOME MIGHT CALL IT……….
The Chancellor began his budget at 12.30pm today which began showing how well the Government has done in supporting the British economy during the recession and how well they will do during their next reign in parliament should everything in the budget be applied on the basis that they get re-elected for the next 5 years.
He commended his party for backing the banks, taxing the bankers ‘ bonuses, supporting the British car industry with the scrappage scheme as well as for other factors they have implemented.
The deepest recession for 60 years according to the Chancellor….and due to the proposals and measures in the budget he believes the UK can pull out of this over the next few years……unlikely I would suggest…..and definitely not at the speed the Chancellor believes!
The devil is obviously in the detail but the main points can be summarised as follows…..
• Growth forecast for 2010 at 1.25%.
• Borrowing to fall to 4% by 2014/15 (GDP).
• Government Spending – increase by 2.5% above inflation for 2010/11.
• £20Billion government savings forecast partially through Whitehall relocation jobs of 15,000 jobs outside of the centre of London.
• Encouraging support for trade and discouraging protectionism.
• Government to sell their shares in RBS, Lloyds and Northern Rock to ensure maximum return on the investment that was made.
• Government also to sell some of their assets to increase cash flow available (student loans, Dartford Crossing…)
BUSINESS & INDUSTRY
The Chancellor in his bid to help businesses also made the following announcements….
- £2.5 Billion growth package for small businesses to invest in people and capital for the future. We will of course await the detail on this before further comments can be made however it would appear a promising commitment.
- £94 Billion commitment of lending to small to medium businesses for funding for capital and future investment as well as for cash flow purposes….depending how this is setup and administered this I believe will be a welcome relief….assuming the banks do as they are told to do. Over the past 18 months they were supposed to support smaller businesses with additional funding and this failed dramatically….let’s hope this new scheme does not follow suit.
- Business confidence is still low and with the above measures he is hoping to boost the confidence in the economy and markets and in turn put Britain back on the road to recovery.
- Business rates to be cut as of October however he only mentioned England Scotland & Ireland so I hope that he just omitted to say Wales!! No ideas by how much as of yet but any reduction is a relief in this current economic climate.
- Tax breaks to be introduced for patents and assistance to be given to those in the computer games industry and technology & innovation centres.
The above synopsis and comments made are on the first review of the Budget 2010 made by the Chancellor…...before acting on any of the above it is important that professional advice is sort especially with regard to the timing of actions and the detail behind any such actions. Eagle Accountancy, it’s principal nor any of its staff will take no responsibility for any actions taken on the above synopsis or comments.