The last Labour government budget before the likely 6 May UK election was partly a political exercise with much not likely to become law due to time constraints before the current parliamentary session ends. The Conservative Party is also committed to another budget within 50 days of the election if they win. However, for your general political briefing purposes only the highlights included:
– Freezing the inheritance tax nil rate band at £325,000 between 6 April 2010 and 5 April 2015.
– Confirming the ISA allowance as £10,200 for 2010/11 and indexing it thereafter.
– Doubling the capital gains tax entrepreneurs? relief to £2 million per person for disposals after 5 April 2010.
– Doubling the annual investment allowance for investment in plant
and machinery to £100,000 a year from April 2010.
– Confirming that the small companies? corporation tax rate will remain at 21% for 2010.
– Increasing the stamp duty land tax rate from 4% to 5% for purchases of residential property over £1 million starting in 2011/12.
– Raising the threshold for stamp duty land tax to £250,000 for first time buyers from 25 March 2010 for two years.
– Substantially increasing the minimum amount a VCT (Venture Capital Trust) must invest in eligible shares.
– Imposing standard rate VAT on postal packets and parcels from 31 January 2011.
– Confirming the revised restrictions on pension tax relief from 2011/12.
– Introducing a penalty for tax evasion of up to 200% where there is an offshore element.
The budget was described in some newspapers as very much that of the Chancellor but heavily influenced by Peter Mandelson, who has described Alistair Darling as » »the safe pair of eyebrows » », with no showing off and just stating things as they are. There was, therefore, nothing really in the budget for the opposition to attack or to frighten the financial markets. Without any disclosure of the spending cuts needed to reduce the large hole in the public finances either, the main division between the parties is still about when to start cutting. Here there is an opportunity for the Conservatives to attack Labour over their admission in the budget of £11 Billion of Government money wasted. It could be argued that cutting such waste this year rather than addressing the more nebulous question of efficiency savings, would do no harm but to encourage the people this needs to be balanced with a credible plan to speed recovery of the economy. There is an important debate on the economy on Channel 4 tonight for George Osborne up against Vince Cable and the Chancellor. A recent opinion poll has the Liberal Democrat as the preferred next Chancellor, followed by the incumbent with George Osborne in third place.
So George Osborne has hit the banks with a bank levy out of the blue and they » »re really, really all upset about this… Know what that is? Political theatre and nothing else. Farcical..