Wednesday, 20 March 2013

Last chance saloon?

Image: Thomas Sommeregger
In a budget that was seen not so much as 'Last Chance Saloon' but more 'Let's be Having Your Glasses Please at Last Chance Saloon' or even 'Haven’t You Got Homes To Go To at Last Chance Saloon', how did the announcement go?

Well, if you are a beer drinking, car driving entrepreneur with kids and fancy a government subsidised new home, pretty well it has to be said! Joking aside, there were some interesting measures announced. Aside from a rather gloomy outlook for the economy as a whole – which, to be honest, can not have come as much of a surprise to anybody – there were a number of measures announced which may have a positive effect on the economy going forward. A further £3bn to be invested in infrastructure can only be a positive although we await, as ever, the finer details of exactly what the money is going to be spent on. A widening of the remit of the Monetary Policy Committee was interesting. While it wasn’t a full 'Fed-eralisation' of the Bank of England, it will 'encourage' the MPC to consider a broader remit than just inflation.

Elsewhere, the measures which are likely to attract a lot of attention are the help for those looking to buy property with a combination of £3.5 billion of support offered to purchasers of New Homes – good for house builders one would imagine – and a further £130bn offered to help those with low deposits to attain mortgages. Whether it should be the state’s role to subsidise and support house prices is, of course, more debatable.

Other possible winners are the brewers and pub operating companies as the much hated Beer Escalator tax was scrapped and a full 1p knocked off the price of a pint of beer. As expected, the fuel duty rise planned for September has also been scrapped which must be good news for the hard pressed consumer. Help with childcare should also help this segment as, indeed, should the increase in nil rate band to £10,000 by April 2014.

The Chancellor also made a great play of developing domestic industry and, in particular, the Shale Gas industry. Measures were announced to encourage wider employee shareholding with potential National Insurance and Income Tax reliefs. Finally, the abolition of Stamp Duty for Aim Market stocks is to be welcomed and should encourage more investment in this market.

So, in my opinion, more than just a budget for drink drivers! The devil, as ever, will be in the detail – especially when looking at woolly concepts like the General Anti Avoidance Rules proposed – but Mr Osbourne may well have done enough to entitle him to an extended licence.

Rob Burgeman
Divisional Director

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