Friday 24 November 2017

Timid touches of the tiller in Hammond's budget.

The most eye-catching announcement in the Conservative budget - the standard "rabbit out of the hat" designed to catch the headlines - is the exemption from stamp duty for first-time buyers of houses up to the value of £300 000.  Happily this is by no means as generous as it looks, as house purchases up to the value of £125 000 are already exempt.

 Given that the average value of the first time buy is £165 000 this means that the lucky purchaser will save a princely 2% of £40 000, or £800: better than a poke in the eye with a burnt stick, as the Australians say, but hardly the kick in the backside  needed to to stimulate our dysfunctional housing supply

Buyers in London, where house prices are higher, will gain the benefit of the exemption up to £300 000 for purchases up to half a million, which can amount to £5 000 for those with monster salaries or a generous and helpful "bank of mum and dad."

So, be it £800 or £5 000, this either a nice little extra or a generous bung for the "haves" in society: a typical feature  of a Tory budget. 

Similarly the rises in the thresholds for the payment of income tax  benefit the "haves"  already paying the standard rate (an extra £70 a year, 20% of the tax exempt increase of £350) and ££340 a year for those on the £40%rate.  By contrast those receiving Universal Credit  gain a net ££25.90 a year, or about 50p a week.  More Tory "unto him that hath shall be given"

More promising is the tacit abandonment of the desperate attempt to put the economy to rights by the fancifully named "expansionary fiscal contraction "  - analogous in medical terms  to bleeding the patient until he or she either expires  or gives a desperate jerk back to life.  This budget is mildly, very mildly, Keynesian, with extra government borrowing of £2.7bn next year  for infrastructure development (some of it in the North!), and ££9.2bn (wow!) for  for 2019-20.

How much past and future misery could have been avoided if this light had flashed into the blinkered neoliberal eyes from 2010 onwards.

Because the truth of the budget is in the forecasts: that the miracle promised from 2010 onwards has failed, , and all those boasts about the "long term economic plan" are empty air.

The economy has stalled and with no substantial change of direction (and government?) we shall be limping along for another decade or so before we get back to where we were before the 2007/8 crash., Until then the poorest and weakest in our society must continue to bear the burden, with those on Job Seekers' Allowance, poor things, continuing to tote their CVs,  on an unimproved  £73 30 a week ( £57.90 if under 25) and new  recipients of Universal Credit mildly comforted by having to live without incomes for only five waiting weeks rather than six..

Figures quoted in this post can be found here

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