The long-anticipated UK budget was out yesterday. I have been waiting for it. I believe many were because of the fiasco of last one that brought down the Prime Mister and the many tough challenges UK is facing. How are they going to tackle them?
First, let’s talk about the bright spots I personally like.
3.3-billion-pound increase in the National Health Service’s budget this year and next, and a rise in spending for social care and schools over the next two years. Those increase will be offset by reduction in foreign aid. However, it is not clear whether this 3.3B increase is keeping pace with inflation or economy growth.
UK will increase state pensions and benefits in line with inflation.
The national minimum wage will increase by 9.7% to 10.42 pounds per hour from April, Hunt said
Health, welfare, education, minimum wage, and pension are all the key areas impacting grassroots or those who are most vulnerable. If they are cut, the quality of life will be impacted severely.
Does education drive growth if it is delivered properly? If UK is desperately to restore growth lost from Brexit, then education should be enhanced.
Will someone criticize the above spending for causing inflation? Inflation is so high. Those are the most vulnerable people who should be protected. “Our priorities are stability, growth, and public services,” said Hunt. “We also protect the vulnerable because to be British is to be compassionate.”
Wow, compassion? That sounds like music to my ears. A new conservative party that is a departure from Thatcherism? How wonderfufl!
One can fight inflation by increasing tax on the rich and the new budget did just that.
Lower the threshold above which the 45% top rate of income tax is paid to 125,140 pounds ($148,053) from 150,000 pounds. This is taxing the rich?
A windfall tax on oil and gas firms would be increased to 35% from its current rate of 25% and extended to power generation firms at a rate of 45% from Jan. 1.
Great decisions! Basically, a good government is a bit like Robinhood – redistribution to even out the suffering from poverty and waste by excessive gains. 😊
Wow, the above is very progressive.
Second, let’s look at the areas for improvement. Hunt set out plans to “make the UK the world’s most innovative, dynamic and competitive global financial centre”, including allowing insurers to invest more in infrastructure.
Is this the key for the growth? I am a bit disappointed. UK is a very economically divided country. London is full of well-to-do financial professionals while the rest of country is relatively poor. Should they seek to diversify the UK economy by supporting other industries? Brexit has done a lot of damage to exports, attracting foreign investment, and small businesses. However, politicians do not even dare to mention that Brexit was wrong. Worse is that it was self-inflicted wound.
It is compassionate, but the country needs ideas for growth. Since energy is such a crisis, could they invest in renewable energy to drive growth and protect the energy and national security?
Any other ideas?