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Budget 2009 - what to expect
The measures the Chancellor is likely to announce in tomorrow's Budget are listed below:
This budget is looking like its desperate, and lacks any kind of green vision - the car scrappage is not well conceived and we need to get people out of their cars and into public transport- and the amount for public transport is too small and not well thought through. The huge debt trap partly the result of ill conceived PFI schemes also borrowed and mortgage from our childrens future .
The awful stats from the UN out this morning that our young people are the most unhappy in Europe just above Romania- is truly awful . What is especially shocking is that this occured during the plenty years- its a retrospective report- and at a time when there was oil and the economy was said to be booming - now we are going into a recession and deflation situation with predictions of over 200 billion of debt burden for the public to shoulder, how much unhappier can our youngsters- the next generation get?
The OECD particularly pointed to women and children having a terrible deal with poverty being highly gendered and the Uk right down the league of womens political and public representation. If womens work was properly paid -the OECD reports -that the UKs GDP would increase by 2% overall !
- In fact any kind of " green vision " by which I mean " social and environmental justice" seems to be missing totally. In an era when unemployment is predicted to go up to nearly 10% in the Uk there is nothing much here to stimulate green collar or other green jobs at all, and green investments or green technology to help the Uk compete in the world or to run local economies supporting communities.
Even the plastic bag tax of the last years budget has been conveniently forgotten.
Also the recovery, when it comes, will be led by small local businesses and they are going out of business at an alarming rate and cant get loans as the money specifically for them still comes via the banks who dont want to lend it.There is nothing here for them at all after the tax rise last time.
The deficit is one of the largest peace time deficits ever recorded and so all of us will end up paying but there is no looking to the future here- and there is even a resumption of reliance on oil- ! just what we dont need in times of catastrophic climate change-
We need a complete reappraissal of economics solutions -we really dont need more of the same that got us into this mess-
Money being pumped into banks and building societies needs to be returned to the nation and we need some assurance that this will happen
The IMF has today issued a warning to the UK and the USA about its level of debt, expected to run to 200 billion and could be between 13% per annum of our GDP, estimates vary widely but some put it up to 100%.
It looks like the stimulus package -although there is movement in the housing market- may not have been such a wonderful idea- as it was based on a predicted quick resumption of growth -which may not happen - so there are questions about how it gets paid back and by whom?Housing is important but its not the only industry -and banking and housing cannot consume the entire budget of the country for years to come. If they are not viable - alternatives need to be found for Redefining Prosperity.Green Prosperity.Transforming the economy
We need a public service which regulates properly- we need corruption to be stamped out and incentives for corrupt practices to be removed, and vast unsustainable rewards in the form of bonuses to be reduced. Some say this is a form of profit share- if so it should go to all employees and all stakeholders. This might be a time - for the possibility of a basic income for all citizens to ensure everyone has enough to meet their needs.
One area we want an increase in public funds - is railways- as it is the railways which will be the object of the new transformation and recovery and the sum of 250 million predicted for tomorrows budget is too small.
Rather than concentrate all the wealth in the hands of some huge businesses like Tesco or the oil companies -we need it to be available to the population as a whole.
We need renewables to be invested in and developed with eco innovation - properly and urgently- to combat climate change which is assuming catastrophic proportions and also bio diversity loss -which will be extremely costly- as todays figures show 10% reduction in polllination activity by bees- and the cost of doing this manually are prohibitive.
We need action for women and young people and children - child poverty has not declined fast enough in times of plenty and the child poverty action groups report out today shows that much more is needed.
Robbing the pensioners is also highly ill advised tomorrow- as more and more people will be pensioners- and its small businesses and jobs that they need as well as decent level pensions as many pensioners live off small investments and are loosing out with the very low rates of interest..One option being considered is increasing ISAs.
Up to now there has in all government messages the assumption of unending growth- it is clear that we now have deflation - the price indexes are falling ... and the economy will contract at what the Chancellor is likely to announce about 3-4%. As a result it is much much safer in a finite world to plan and manage for a lower growth economy- than a continuous growth scenario which will each year perhaps contract., rather plan for this changed scenario and transform our economy so it looks like something for the 21st century rather than a failed version of 20 th century plannning and misspending of all of our resources.
Miriam Kennet Green Economics Institute- talking on Radio 5 live today April 22nd 2009
The article below predicts what is expected in the budget
By Telegraph staff
Last Updated: 7:10PM BST 21 Apr 2009
Economy - The Chancellor will admit the economy is going to shrink more than he expected. Most experts predict he will cut his target to show a 3pc contraction this year, compared with the 1pc decline forecast in his 2008 pre-Budget report. The Item Club sees a 3.5pc contraction. However, Mr Darling's optimism about the recession being over by the end of the year is expected to remain undimmed.
Public finances - Government borrowing is expected to hit around £175bn in 2009/10 - up from £38bn predicted in the 2008 Budget, and a revised pre-Budget estimate of £118bn. To pay for the bank bailouts and stimulus packages, big Whitehall departments and government agencies can expect years of spending constraints. Only funding for "front line" services such as education will be protected - a General Election is looming, after all. There are rumours that thousands of "back office" jobs will go in Whitehall, local government and quangos as Darling seeks to make efficiency savings of £15bn by 2011/12 - but don't hold your breath. There is also likely to be news on asset sales - stakes in Royal Mail, the Royal Mint and the Met Office.
Business - The Government is to act to plug a gap left by trade credit insurers, which normally cover businesses against non-payment by their customers. The temporary guarantee scheme will only top up existing cover and will not be available where cover has been withdrawn. A series of measures designed to encourage businesses to trade and invest will include a beefed up role for the Export Credits Guarantee Department, including a facility to provide support for short-term trade finance for smaller businesses. Also under consideration is a temporary increase in the £50,000 annual investment allowance, which lets businesses write off the cost of qualifying expenditure against their taxable profits. Employers and unions have urged state wage subsidies in preference to large scale redundancies. Similar schemes are being used in Europe and were used in the UK during the eighties' recession, but the Treasury seems reluctant to bite.
Jobs - Darling claims this will be a 'Budget for jobs'. He plans to set out a £2bn package that will expand the range of Jobcentre Plus services and launch a new initiative to give unemployed young people additional training and work experience. Expect some sort of public works programme.
Tax - Don't expect a change of heart on the planned 45pc tax rate for those earning above £150,000 a year in 2011. The Chancellor may even be tempted to bring forward its implementation. Given the government's track record, stretched purse and Brown's G20 promises, it is unlikely there will be a let up on loopholes. The Chancellor has said he will publish new proposals for a voluntary code for banks on paying taxes. There is likely to be more action on tax havens and the conclusions of an independent inquiry - maybe even a "name and shame" list.
Savings - People who rely on investment income, such as pensioners and savers, have been hard hit by falling interest rates. Darling will want to help them. He could raise the limit on cash ISAs to £7,000. It is more unlikely he will make all savings tax free, as the Tories have called for.
Pensions - It is likely that Darling will tweak pension and working family tax credits to help those who are struggling. One revenue-raising measure being touted is abolition of higher-rate income tax relief on pension contributions, which could raise up to £7bn a year for the Treasury, according to City estimates. This would not be popular as under Labour more people been drawn into the higher-rate band.
Housing - A £1bn package is said to have been earmarked to start stalled homebuilding and infrastructure projects. There is also talk that Darling will underwrite £50bn of new mortgage-backed assets as he give his full response to the Crosby report. The report recommended additional funds to kickstart the mortgage market and meet the shortfall in funding. He could also extend the temporary limit at which homebuyers start paying stamp duty from £125,000 to £175,000.
Property - Rules governing Real Estate Investment Trusts could be reformed, including changing the rules which force landlords to pay out 90pc of rental income in dividends to shareholders.
Technology - Prime Minister Gordon Brown has talked a lot about developing world-leading technologies to help pull us out of recession. This could extend to help towards training and skills and possibly the building of the infrastructure to deliver superfast broadband. No specific measures have been hinted at so it is hard to know what he means. We have been here before.
Green economy - The government has said the Budget will include a number of environmental measures. Mr Brown claimed this would include the creation of thousands of 'green' jobs. One specific measure cited is a pilot scheme in several cities for a network of charging points for electric cars - but at £20m it is small beer. There is also talk of a £5,000 subsidy for buying plug-in hybrid and electric cars - but only from 2011/12, which is when many mainstream car makers plan to launch new 'green' models.
Environment - Given rising concerns about protecting the environment, there may be some incentives for wind farms and low carbon buildings. Investment in nuclear power could also get a mention.
Fuel duty - Keep an eye on this after the 2p-a-litre rise on April 1. The Treasury pockets around two-thirds in tax on every litre sold and may feel justified in taking more with oil hovering around $50 a barrel.
North Sea - Oil companies could be given incentives to invest more in the North Sea. We saw a 78pc fall in exploration drilling in the first quarter of 2009 and Darling will want to prevent a future collapse in oil and gas-related income.
Car scrapping - The car industry is hurting, thousands of jobs have been lost and thousands more are under threat. Lord Mandelson wants a £250m 'bangers for cash' scheme to provide a £2,000 discount for those trading in cars older than nine years for a new one. A similar scheme in Germany triggered a surge in car sales. The amount is small fry compared with the billions the government has ploughed into the banks and would attract positive headlines.
Transport - The government is considering a £250m stimulus package for the railways aimed at boosting revenues and passenger numbers. Network Rail has been asked to bring forward certain projects - such as targeting fare dodgers and incentive for less frequent train users.
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