In brief: budget analysis and viewpoints.

Wow, we're coming very quickly towards our 50th post here. That will be the first great milestone of the blog in my eyes. Anyway, I wanted to write about how the Con/Dem (haha, see what I regurgitated there) government has affected the country so far. Admittedly, not much has actually happened, but given the recent publication of the budget, we can now see what changes are going to be brought to the country in the near future.

The most obvious change, and the one that will hit people's pockets in the most obvious way, is the increase of the VAT rate from 17.5% to 20%. Whilst this may seem to be a change which will only be minor (for instance something that is VAT applicable now, which costs £1.00 after VAT, should now cost (£1.00/117.5)*120=£1.02128...). However, when you consider that this added VAT will have to apply at every step of the creation process, and that it will probably be rounded up a bit each time, we can expect to see up to 10% price increases for a 2.5% increase in government income. Yeah, smart. Admittedly, the one plus side is that VAT-exempt items stay VAT exempt.

And who does this hit hardest? Some would say the rich; after all, they're the ones who buy most, and thus stand to lose the most money from this change. But the real answer is those who can ill-afford an extra 10% on their purchases. The people who the rich probably aren't even aware exist, the unfortunate ones who have to scrape what they can just to live in relative poverty.

The one surprise is the increase in capital gains tax to 28% for higher rate taxpayers, whilst basic rate payers have no increase whatsoever. This writer thinks it must be the Liberal influence seeping into the cracks of the sullen exterior of Tory politicians. In fact, due to the ongoing Americanisation of the whole planet, one can almost imagine someone wearing a Union Jack version of one of those American-flag top hats, with wild grey hair and a monocle, and blaming the 'damn Communists' for a lack of a complete autocracy.

The increase in personal tax allowance is almost an irrelevant addition; this extra £1000 will actually equate to only just over £200 in terms of tax saved, and if Osborne really wanted to help out those in dire need of the cuts to be staved off, he would've done better reintroducing the 10p tax band. But that's well and truly buried now; for the next four or five years at least.

The one thing which really smacks of Toryness (always a negative adjective in this blog) is the freezing of higher rate tax for a few years. In my personal opinion, the higher rate should be raised to about 50%, yet also the income level for this tax be raised to about £50,000 to compensate; as the current ~£37,000 is really not a high salary in some areas, particularly London, where the average central salary is about £50,000, and housing and goods are priced accordingly.

The public sector cuts are abominable. As both my parents work in the public sector, I hear plenty of stories about the quality of the work and indeed, the less-than-inflation pay increases. To then go and cut these frankly understaffed already areas is one of the worst ideas since the Algeciras conference. And to try and replace some of the education cuts with so-called 'free schools'? All this will lead to is a general deprecation in the quality of schooling akin to teaching us all Roman ideals.

Again, it is a ridiculous move on the half of the Tories to REDUCE corporation tax. Again, I'll make an analogy to American history. Remember the laissez-faire attitude taken by the Republicans to the giant railroad corporations and trusts in the 1920s? What happened then? If you can't think, I'll give you a clue... just find out what happened in October 1929 and find out the impact on America and the rest of the world.

It's frankly naive to think that the budget deficit can be cut this fast. George Osborne is silly for thinking so. If only Vince Cable had been made Chancellor in this coalition, then we'd be getting somewhere. Of course, the root of the problem dates all the way back to the 2007 recession in America, and the consequent collapse of the Lehman Brothers (who were a massive financial institution); compared to that, the nationalisation of the banks in the UK was a small move. We need to take things slowly. Steady out the economy first, before making any rash moves that provide a continuation of the instant gratification to the banker friends of the Conservative party. Which is JUST what we need.