Apart from the usual fantasy of the deficit being reduced by super growth over the long term, there were three unusual points in the budget.
Firstly the business rates freeze.
Business rates are set to rise next week by somewhere between 20% and, as a car dealership just said on BBC, 600%. BQ's own business is facing a 34% rise and that means job cuts. There is no possibility of that not happening. A business cannot absorb that kind of rise. Its money that is paid from profits. Business cannot just pay out from nothing a tax rise that is based on the value of a premises in 2007. The height of the boom. Prices cannot be just increased either. They are already increasing. Prices are around 25% higher for most retailers due to the collapse of the £ vs Dollar.
The business rate freeze - there isn't any detail I can find online yet, but it doesn't start until October. And its only for a year. Not sure yet how this will work out yet. I think its just Labour trying to get out of its very own business 10p tax rate fiasco. A huge tax rise in the worst possible place for the economy.
The winter fuel increase came up in our fantasy budget a few weeks ago. Its far enough away for the government not to worry about it, yet is a headline for pensioners and anyone on benefits.
And the basic bank account.
As far as I am aware all of the major banks and the vast majority of smaller ones do have basic bank accounts. But as they have no charges, no overdrafts allowed and limited funds into them banks do not promote them. Some branches are completely unaware that they exist and they are rarely offered. Its a complete failure of government in much the same way that business lending is.
Why the Chancellor wants to see banks introducing more of a product that won't be offered or marketed is a mystery.
Wednesday, 24 March 2010