The Budget 2012
Live coverage as Chancellor George Osborne presents his Budget for 2012.
- Good morning, welcome to our live coverage of the 2012 Budget.
- Just two and a half hours to go until this man makes his Budget announcement in the Commons...
- In a pre-budget blow to Osborne, data released today shows that the government borrowed almost twice as much as expected in February.
Reuters' Fiona Shaikh and Peter Griffiths write:
The Office for National Statistics said that public sector net borrowing excluding public sector interventions - the government's preferred measure - hit a record for the mo nth of February. It jumped to 15.183 billion pounds last month to from 8.875 billion pounds in February 2011.
This was almost twice the average forecast in a Reuters poll of 8.0 billion pounds. However, borrowing in the fiscal year to date came in at 109.957 billion pounds, down from 118.890 billion in 2010/11, and well on track to undershoot the government's 2011/12 target of 127 billion pounds.
Osborne is also expected to reveal that government borrowing will fall below 100 billion pounds in the 2012/13 fiscal year for the first time since 2008/09, thanks to a one-of f windfall of 28 billion pounds from a transfer of assets from the Royal Mail pension fund.
The ONS said February's jump in borrowing was driven by a 2.7 percent drop in tax receipts on the year, while government spending climbed 8 percent.
Income tax alone dropped 12.4 percent on the year in February, whilst net social benefits climbed 11.2 percent. The ONS said government departments tended to backload their s pending, but that had been more marked in February than last year.
The broader public sector net borrowing measure -- which includes the cost of bailing out Britain's banks, as well as some revenues from the sector -- rose to 12.909 bil lion pounds in February, up from 6.066 billion pounds in February 2011.
- The jury is still out on whether the government will meet its budget targets and hold on to its prized AAA rating, according to a pre-budget Reuters poll of industry experts.
The poll saw 15 of 29 respondents saying the government would balance its cyclically adjusted budget by the 2016/17 financial year.
The poll gave only a one-in-four chance that Britain would be downgraded, down from a 27.5 percent chance given in a poll taken last month.
- Good morning
- Good morning Laurence. Thanks for joining us.
- Laurence Copeland is a professor of finance at Cardiff University Business School. He, along with a number of external experts, will be joining our live coverage of the 2012 Budget, providing comment and analysis throughout the day.
- What do you expect to hear from Osborne today, Laurence?
- The consensus seems to be that today's Budget will feature a number of politically driven tax measures. Reuters correspondent Matt Falloon writes:
in a move that would please his own party, he may remove a 50 percent income tax band for the highest earners. The Conservatives say that high a levy is a barrier to aspiration, while the Labour opposition say it is a fair way to spread the pain.
To please the Liberal Democrats, the junior coalition partner, Osborne is expected to raise the income tax threshold by more than previously announced to 9,000 pounds ($14,300), which may please some low and middle earners.
Government officials have also disclosed the introduction of a new 7 percent stamp duty rate on sales of property above 2 million pounds, along with an expected corporation tax cut by 2 pence to 24 pence in April.
- not a great deal over and above what's been leaked already. I assume everything important has been haggled over for weeks with the Lib Dems - hence teh impossibility of keeping it under wraps
- that's what I mean - not much!
- the 50%-down-to-45% tax rate thing is big politics, small economics
- the tax threshold is excellent news, because it increases teh reward to the working middle class
- the extra stamp duty on property over £2m is a gimme
- it won't deter many oligarchs from moving to London, which is OK
- my back-of-the-envelope calculation was that it might raise £50m
- or 25 mansions-worth of revenue
- he has to operate in a revenue-neutral context, so I guess a couple of percent off corporation tax is all we're going to get. But we can be sure he'll come up with some surprise somewhere - Chancellors like to do that. He may go for something populist. Fuel tax reduction would be unwise. But a cut in e.g. road fund tax could be appealing as a quid pro quo for introducing road tolls (and it would be a very sensible thing to do)
- Hi. Tim Knox., Director of the Centre for Policy Studies, signing in
- Good morning Tim, thanks for joining us
- Labour leader Ed Miliband has released a short statement on today's Budget. He says:
“It is completely the wrong priority to cut taxes for the richest people in Britain earning over £150,000 a year.
“The Government’s economic plan is failing.
"What we need today is action to get jobs and growth moving in this country.
"What the Chancellor must do is ensure that every penny he can raise from those at the top is spent on helping millions of ordinary families who are struggling to get by."
- Tim, it's been one of the most leaked Budgets ever, but do you think the Chancellor has any surprises up his sleeve for us today?
- Intriguing tweet from the BBC's This Week presenter Andrew Neil (@afneil).
He says: "Watch out for 2 Budget surprises: on welfare and corporation tax. Can't say more. But watch out, I say."
- Positive surprises: Corporation Tax down to 20% with an announcement of further cuts to come
- Negative surprises: the Chancellor using the £18 billion of assets in the Post Office Pension Fund to fund various infrastructure projects. The £28 billion of liabilities would be in never-never land and not show up in National Debt
- Thinking of buying a house worth 2 million plus? Watch out, the Chancellor is coming for you.
Osborne is set to introduce a new 7 percent stamp duty rate on sales of property above 2 million pounds, as the government launches a potential tax grab on the high-end property market.
- there was an interesting straw in the wind the other day - a survey (sorry, I've forgotten where published or by whom) which suggested that the public's patience with non-working welfare dependents was wearing thin. Instead of getting keener on welfare in the recession, they seem to be going the opposite way: we can't afford to support so many....etc etc If the Govt has got wind of this sort of shift in public opinion, the Chancellor may be emboldened to make a few minor cuts in welfare
- or even something major
- Hi. Patrick Nolan, of the think tank Reform signing in.
- Good morning Patrick, thanks for joining our Budget 2012 live coverage. Do you think there will be any surprises today?
- Hard to say if there will be any surprises - but I'm of the school that prefers Budgets to be boring. The Coalition needs to stick to its earlier plans rather than look for gimmicks and headlines
- After-all, the Autumn Statement estimated public sector net debt increasing by £471 billion over the next 5 years - so the public finances are not out of the danger zone ...
- Fancy taking a punt on today's Budget? Ladbrokes has announced some interesting odds. This is from their website:
CHANCELLOR GEORGE Osborne is most likely to deliver the budget speech on Wednesday whilst wearing a purple tie according to Ladbrokes.
The bookies political odds compilers make purple the 2/1 favourite, with a red tie a 12/1 chance. It’s 25/1 he wears an orange tie, with white the 33/1 outsider.
The catchphrase market is always popular and given the likely tone of the speech it’s just 1/50 that the word ‘deficit’ is used. It’s also odds-on (1/5) that ‘budget for growth’ gets mentioned and ‘tough choices’ is an 1/1 shot. ‘Long Run’ is a 6/1 chance in the market with ‘Libya’ and ‘Earthquake’ both topical 3/1 shots.
Coalition partner Vince Cable is also just 8/1 to be caught yawning during the speech with Osborne 20/1 to drop the famous red briefcase.
Alex Donohue of Ladbrokes said: “We’re hoping Osborne reaches for a brightly coloured tie on Wednesday morning otherwise we’ll have budget problems of our own. We also think that some reference may be made to foreign affairs along with the usual talk of austerity measures.”
- Ian Mulheirn of the Social Market Foundation signing in
- Good morning Ian, thanks for joining.
- Hi there, Nick Ogden, CEO of CashFlows, signing in
- Morning Nick
- Sam Bowman of the Adam Smith Institute signing in.
- Sam, Nick, Ian - if you were Chancellor for the day, what would be your Budget priorities?
- New figures on CPS blog show that 7% Stamp Duty wd raise paltry amount (£300m) -- and wd of course encourage more evasion.
- My budget priorities would be: 1) Cutting spending significantly, especially the NHS & benefits (inc tax credits); 2) Raising the personal allowance to £12k (pegged to minimum wage); 3) Scrapping the 50p rate; 4) raising 40p threshold; 5) Legalizing & taxing drugs like cannabis, ecstasy and powder cocaine.
- Interesting point by Tim Knox. At Reform we've been concerned that the Coalition is increasing the tax gap by introducing high and variable tax rates on smaller bases ... exactly the wrong approach
- That borrowing number is a real wake up: and a timely reminder that we should keep our eyes on the big issues. Pre-budget kite flying on the scale of the last few days suggests to me that the government is keen to divert attention away from still-anaemic economic growth.
- I agree with Sam, but if he thinks we're going to get any of that, he's jumped the gun on drug legalization
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