Blog 2023 Malcolm Blair-Robinson

Osborne’s Big Day

Well now we know. This Blog will not dissect the budget as there are so many expert commentators doing this that the market approaches saturation. Some quick points.

What I liked

The increase in capital gains for higher rate taxpayers

The raising of the tax threshold for the low paid

The increase in VAT

The phasing out of tax credits for those earning over £40,000

The start on benefit reform to reduce the bill

The freeze on public sector pay

The setting out that government departments will face an average 25% cut in the spending review

The concessions to business and industry designed to encourage growth

The aim to re-balance the economy with more emphasis on manufacturing and renewal, saving and investment

The reduction in the scope of the State

What I did not like

The Bank Levy is too small in scope to yield much benefit or impact proprietary trading

Freezing child benefit hits the poorest hardest and still pays those who do not need it. It should have been dealt with like tax credits, but remained linked to CPI.

The State Retirement Pension still goes to many who do not need it. Likewise it should have phased out from £40,000 total retirement income.

Point of Interest

It is wrong to assert that a VAT rise hits the poorest. This is because those on low incomes pay out almost all their earnings or pension on essential living costs, most of which are VAT free. What hurts most is income tax. By raising the threshold by £1000 this can put an extra £200 in the pocket of a single person. Very little of that will be clawed back in VAT.Even if all this extra cash went on VAT rated items the increase would only amount to £5, so the least well of really do benefit from less income tax. The lower middle and middle incomes will feel it most but the high incomes who spend will pay the most.

Honey Bees

New research is to be undertaken to try and discover why there has been a marked decline in honey bees, who perform a vital pollinating function in the ecological system. The decline in the number and variety of wild flowers is thought to be a contributing factor by some.

I am fortunate to live in the heartland of a National Park where much of the farming in the area is now organic. The richness of the countryside and the abundance of wild flowers compared to a few years back just goes to show that the benefits of organic farming go beyond just the production of healthier food.

Nevertheless it is important to remember that many people cannot afford to pay the exra for organic and in some parts of the world millions stare starvation in the face because of draught, pests and crop failure. We owe to them the responsibility to ease their plight and this will in part mean resorting not only to pesticides but to genetic modification of crops to create strains which can cope.

There is a balance to be struck between environmental preservation and human suffering and however important it is to cut a better deal with nature, we must also give priority where needed in the world to feed the hungry. If you think your task is done by just promoting organic and opposing every other form of husbandry, look into the eyes of a starving child and think again.