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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

23 Apr 2009

2009 Budget in brief

Whilst we wade through the budget looking for a scrap of good news, here are the salient points:

Tax changes:
Cigarettes & Alcohol up by 2%
Car fuel up by 2p per litre in September
Income tax for those earning £150,000+ to go up to 50% from April 2010
Child element of tax credits to be increased by £20
Stamp duty exemption on houses up to £175,000 to be extended to the end of 2009

(as usual some spending has already been announced, so the Government can claim the credit twice..)
£500m to boost housing projects that have stalled
£1bn for climate change projects
£50m to upgrade military housing stock

£2,000 off a new car purchase for those trading in a 10 year old car
Pledge to reduce house possessions
New power plants to be exempt from climate change levy from 2013
A range of changes to pensions to keep them in line with inflation
Worlds first 'carbon budget' announced £435m to be earmarked for promotion of carbon efficiency

When you consider how eagerly this budget has been awaited, the damp squib that has been delivered is full of small and seemingly insignificant steps. When you consider the dynamic approach that Gordon Brown has demonstrated on the world stage, the few crumbs that Alistair Darling has been left to rearrange into an attractive offering are looking decidedly pathetic.
Gordon Brown has been announcing steak dinners to the world in terms of money pumped into economies, and we are left with a small rather unappetising unsatisfactory snack... Of course, the truth is that the money has gone (not the the money was actually there in the first place), the government is spent out and frugality is all that is left. Some might say that we should have employed frugality in the first place so that there was still some 'wriggle room' for sweeping gestures to boost the economy when it started to show signs of recovery. Instead of which we have thrown good money after bad debts and are left with disgraced bankers enjoying the fruits of their mismanagement.
A summary of the budget for the majority will be something like this:
You are due an increase in child tax credit which should hopefully cover the rise in car fuel tax, you've probably already given up smoking, so the couple of beers or glasses of wine you have each week will now cost you more. You haven't a hope of earning £150,000, and you probably could care less (if you really tried hard) about carbon emmissions right now..
You are considering flogging your 10 year old car for £1000 and buying a 10 year old 'banger' for £90 before attempting to get the part-exchange deal...You are also considering joining the army when your house gets repossesed as you hear they are refurbishing army accomodation.
Nothing much to whoop about for anyone as far as I can see...

Related posts:
UK bank rate drops to 1%

UK bank rate at 1.5%
Negative interest rates?
UK bank rate at 3%


Rachel said...

I totally agree with you - to be honest I don't know why they bothered to have a budget at all really!

jay said...

Presumably it was to give plenty of warning to those earning more than £150,000pa so that they can take measures to avoid the 50% tax (that'll probably be you next year the rate you are going...)