Chancellor reverts to all the usual tactics
DANNY CLIFFORD, tax and trusts partner at Ensors Chartered Accountants, gives his take on George Osborne’s Budget speech
I HAD hoped that we had dispensed with Budgets of the type associated with Gordon Brown and more latterly Alistair Darling, with headline-grabbing policies aimed at the “bad guys”, the glossing over of any bad news announcements and a giveaway at the end.
George Osborne seemed to be aware of the cynicism that has greeted recent Budgets by making strong play of the fact that his numbers had been independently produced by the Office of Budget Responsibility. However, he then slipped smoothly into the standard format.
That said, it does seem that, he has a clear idea of where we need to be headed. It is a truth (a necessary evil if you like) that the way to grow an economy and make the country and its population better off is to allow those who create that wealth to reap the rewards of their efforts.
Recognising this, the Chancellor has acted to reduce the level of Corporation Tax by 2p in the pound and has outlined proposals to bring it down still further. For individuals he has indicated that the 50% top rate of Income Tax (it is actually 60% in effect) is likely to be cut when affordable.
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These measures (and others, such as increased Entrepreneur’s Relief, Enterprise Zones and Research and Development Tax Credits) are aimed at stimulating the creation wealth, and the creation of jobs.
However, we have been in this hole before; think late 1970s and early 1980s. Climbing out of that hole was an extremely painful experience for many people.
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Largely through mismanagement of the economy we have managed to get ourselves back into trouble, and I have no reason to suspect that the recovery will be any less painful this time.