The Budget 2021

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    • Staff Notice

    Budget: Rishi Sunak set to spend but hopes to return to caution soon

    The never knowingly under-hyped Rishi Sunak will give what he has already described as a "Budget like no other".

    The Covid crisis has certainly led him to do things that no other Conservative chancellor has.

    The government shut down much of the economy, meaning shops were shuttered, tills were empty, incomes collapsed

    Once upon a time in a land far, far away we supposedly had a Conservative government, then the virus hit....


    Boris will always want to be popular and spend, spend, spend. The chancellor, though, has an enormous financial blackhole to fill and we are of course still in the middle of the pandemic, even if things are starting to look good now with the vaccine rollout. How are the two reconciled?


    Should taxes be higher to start clawing back all that slush money, or should we try and keep on the spending splurge and hope for a Roosevelt style New Deal kick start to the economy?

  • Not enough it should be 50% :P It's all smoke and mirrors and nothing will change accept for pushing some digits around on a screen. They can just make it up as they go along.

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    Not enough it should be 50%

    Oy! I run my own ltd company as a one man band. At least small businesses stay at 19%


    Glad to see fuel and booze duties frozen.


    £400 Bn is an eye-watering amount of extra national debt though.

  • Oy! I run my own ltd company as a one man band. At least small businesses stay at 19%

    I was thinking of the likes of Amazon and Google. I actually think they need to bring out a separate internet services tax to deal with them. The risk is that the toss pot internet companies will then pass the costs onto the customers so nobody wins here except for the government who get more money to squander away to their mates and launder into their pocket. We could do with an RAF pilot going rogue and doing his duty to the British public. There was a rogue pilot many years ago that pulled a stunt flying through Tower bridge IIRC.


    Here we go LOL


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    • Staff Notice

    Once upon a time in a land far, far away we supposedly had a Conservative government, then the virus hit....


    Boris will always want to be popular and spend, spend, spend. The chancellor, though, has an enormous financial blackhole to fill and we are of course still in the middle of the pandemic, even if things are starting to look good now with the vaccine rollout. How are the two reconciled?


    Should taxes be higher to start clawing back all that slush money, or should we try and keep on the spending splurge and hope for a Roosevelt style New Deal kick start to the economy?

    I think Rishi has done a superb job on the budget. I accept that the support systems have to continue for a few extra months, because without them, jobs and businesses will be lost, together with the tax that would otherwise be generated once things get back to normal.


    It’s a huge balancing act.

    • Staff Notice

    Budget 2021: Key points at-a-glance


    Corp tax to rise to 25%! From a conservative government.... What do we think of that?

    It’s what I would have done. Don’t forget that smaller businesses are exempt from that increase and we are still applying the lowest rate of our major competitors. Don’t forget that other countries are likely to put up their rates as well, probably to the extent as to maintain previous levels of competitiveness.


    Imagine that if our closest competitors put up their rates by 5+ per cent. That would make them a lot less attractive places to do business, making the UK the obvious choice to transfer to. That would put even more business our way.


    The whole thing is a very elegant balancing act. He put a lot of work into this.

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    Not enough it should be 50% :P It's all smoke and mirrors and nothing will change accept for pushing some digits around on a screen. They can just make it up as they go along.

    That would result in much higher prices for you and me, so no thanks.


    As far as the likes of Amazon are concerned, we just need to change the rules to recognise the sales in this country. At the moment, nearly all their taxes are paid in the States. That can’t be right.

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    It’s what I would have done. Don’t forget that smaller businesses are exempt from that increase and we are still applying the lowest rate of our major competitors. Don’t forget that other countries are likely to put up their rates as well, probably to the extent as to maintain previous levels of competitiveness.


    Imagine that if our closest competitors put up their rates by 5+ per cent. That would make them a lot less attractive places to do business, making the UK the obvious choice to transfer to. That would put even more business our way.


    The whole thing is a very elegant balancing act. He put a lot of work into this.

    Hadn't thought about the fact that other countries will have to put up rates too, so interesting OB.

  • The usual Pollyanna "Everything is going to be wonderful, tra, la, la" from the usual suspects. All based on the most optimistic of interpretations.


    The Institute of Fiscal Studies....... who have a bit of expertise in this area, but hey, who listens to experts eh..? They only know what they're talking about..... have taken a somewhat more sober look into the budget.


    Institute For Financial Studies - Budget 2021


    Taxes are going to be at their highest rate since the 1960s. Not bad for the party of low taxation, and some of those are stealth taxes too.... freezing tax thresholds. This could hurt a lot of people at the lower level... that is, the consumers who Sunak may later find himself relying on to spend our way out of the black hole. And freezing tax thresholds is the least effective way of raising money.


    Snip


    Freezing the income tax personal allowance is, as he said, a progressive tax increase. But it is the least progressive way of raising income tax. Even four years of freezes though will undo only a fraction of the increases we saw over the 2010s.


    Note that those increases in the allowance over the 2010s were key to ensuring the remarkable result that middle earners did not lose out from austerity in terms of higher taxes and lower benefits. This rise will hit “middle England”. A political risk perhaps.




    Populist claims that even with the Corporation Tax hike, our rates will be "low" which they claim will keep Britain competitive. Not so according to IFS:


    Snip


    The really remarkable policy though was the raising of the corporation tax rate from 19% to 25%. This looks in large part like the act of a chancellor hemmed in by manifesto commitments not to raise the rates of income tax, VAT or NICs. As the OBR says the corporation tax rise “will increase the cost of capital, lowering the desired capital stock and business investment”. It is important to remember that the headline rate is not the only thing that matters. While that has been cut a lot over the last decade the base has been widened. That’s one reason revenues have held up well; and the rate rises will be harsher than they would have been had the base not been broadened. On various measures the effective rate of corporation tax in the UK is currently average rather than low by international standards.


    So..... Britain will become less competitive internationally rather than more. Hey.... it's not me saying that, it's the institute for Fiscal Studies. Argue with them if you have a drip with me pointing out what you're ignoring.



    To cut a long story short, the conclusions do not look as sunny as some predict. The conclusions that the IFS come to paint a picture of a Chancellor boxed in and with little real room for flexibility, trying to stay populist and please people with headline giveaways but knowing that he is going to have serious headaches further down the line. A thin scraping of jam today on a rather small slice of bread, but we're going to have to pay for it sometime, sooner or later.



    snip

    In conclusion

    Mr Sunak had three challenges in this Budget – to ensure the right level of support for the economy over the next few months, to set about fixing the longer term public finances, and to deal with the longer term consequences of the pandemic, especially its unequal consequences.


    He has done a decent job of the first, arguably erring on the side of generosity.


    He has given us a sense of where he wants to go on the second, but he still has a lot of work to do and his spending plans in particular don’t look deliverable, at least not without considerable pain.


    On the third he has been silent. No money to deal with post pandemic priorities. No policies to deal with the inequalities that have opened up over the last year between rich and poor, old and young, more and less well educated. This is a big hole in the chancellor’s and the government’s policies, a hole which needs to be filled and soon if we are not to suffer a much worse hangover from this crisis than need be the case.


  • That would result in much higher prices for you and me, so no thanks.

    Not for me because I have not bought a single product from Amazon since the days they only sold books. They took money off me for a book they had advertised and then held that money for 2 months because they where waiting for the book to go to print and be delivered. Conning scumbags. I vowed never to use them again and I haven't. I couldn't even get the money refunded back to me and they kept coming up with excuses and making it a pain in the arse with sending me around in circles from department to department and wasting my time. That was many years ago and as a company they have progressively got worse.

  • I cant say I have ever had a problem with amazon, whenever I have needed to return anything they have always made it easy and as soon as the item is showing as being on its way beck to them they have processed my refund, whereas other companies insist the item has been received by them and the refund has to wait anything up to 14 days from that date, so from experience I cant fault amazon.

  • I'm going back years ago. They where just a bookshop then. Even so...I still would not support them simply because of how they treat their workers amongst other reasons. I do have some moral standards and if it means sacrificing myself to stand by my morals and fight then I will.

  • Being in Lockdown, I buy E books and other goods from Amazon. The process is straightforward and easy. I have never had a single problem with the buying process. For the consumer, Amazon is a great marketplace.

    I've no interest in their internal workings. I order and I get what I pay for. --- End Of

    • Staff Notice

    We use Amazon a lot and we never have any problems at all. The refund process if something arrives which is not quite what you wanted is straight forward and hassle free.


    I can’t say the same for other online delivery services, unfortunately.

  • A lot of what is said about how how amazon treat their workers is overexaggerated and blown up by the media as is a lot of things.

    No it's not. Do you know anyone that works for or has worked for Amazon. Get it from the horses mouth and the media and then put two and two together.

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