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Budget 2013


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#21 Padge

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Posted 21 March 2013 - 12:07 AM

I'm really struggling to get my head round the plan for the government to start loaning people money for deposits to buy houses.

Isn't part of the reason for our current woes that banks lent money to people who couldn't really afford to pay it back, to buy houses they couldn't really afford to buy, that fuelled further house price inflation, that encouraged more people to borrow even more money they couldn't afford until it all eventually went bang and the government had to use taxpayers money to bail out the banks leaving a massive hole in the public finances that is getting bigger by the day despite all the never ending austerity we’re being subjected to?

So the solution to that, according to the Chancellor, is to cut out the middle man and give taxpayers money direct to people who can’t really afford to buy a house to encourage them to take on a load of additional private debt they may never be able to repay, thus further fuelling house price inflation while potentially restarting the whole vicious debt circle again before we’ve fixed the last one.

It just seems absolutely ludicrous to me.

Wouldn’t it have been simpler and more effective to release the money being used for this wheeze to local councils to build lots of social housing at affordable rents, thus stimulating the construction industry and creating jobs, providing homes for people who need them, preventing encouraging people taking on mortgage debts they can’t repay and avoiding fuelling even more extortionate rises in house prices. Increasing social housing rental stock would also help bring down the ridiculous levels of private rent, making even more homes affordable for even more people, and reducing the need for taxpayers to subsidise private landlords through the payment of housing benefit.


Don't be silly John, how do the ridiculously rich people make even more ridiculous amounts of money out of such an obviously sensible idea to benefit the ridiculously poor of the country..

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#22 gingerjon

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Posted 21 March 2013 - 07:11 AM

Even The Telegraph, which applauds quite a lot of the budget, is unimpressed by the 'let's create a housing bubble again' idea.
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#23 Griff9of13

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Posted 21 March 2013 - 07:23 AM

One glaring piece of hypocrisy from Gidion was him insisting on calling employers NI contributions a ''tax on jobs'' in the same week that IDS has been moaning to all that will listen about the spare room subsidy being called the ''bedroom tax''. You can't have it both ways.

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#24 RidingPie

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Posted 21 March 2013 - 08:00 AM

I think the housing loan ridiculousness is actually their plan for a medium term vote winner for the conservatives. In 2.5 years time people who take these offers will be happily living in their new homes feeling that the government has done them a favour, hence more likely to vote conservative.

Also in the shorter term it will bring more money in to the government. These new homes will still have to pay stamp duty etc which will ring nicely into the coffers of the revenue, and support an industry which has been scraping along the bottom for the last 2 years or so. From the governments perspective their is also virtually no risk, as even if house prices collapse and the people got bankrupt, getting their houses reposed the first creditor to be paid will be the government.

I still think its a terrible idea to create another housing bubble. The economy DOES need a stimulus no doubt about it, but this is showing no lessons have been learned in the last twenty years.

Sorry if that all sounds a bit jumbled my 1 yr old hasn't been sleeping well and I've not had enough tea to fully make sense (although I guess it could be argued I never do regardless)

#25 markleeds

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Posted 21 March 2013 - 09:06 AM

Will the shared equity scheme be available for all houses or just the poorly built, plaster board show boxes that are getting knocked up? I refuse to buy a house that I will in no way be able to resell.

#26 Wolford6

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Posted 21 March 2013 - 09:09 AM

Instead of giving money to encourage the mortgage market, Osborne could have released the same funds to get unoccupied council houses up to scratch, and only allow them to be let to people in work.

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#27 RidingPie

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Posted 21 March 2013 - 09:34 AM

Will the shared equity scheme be available for all houses or just the poorly built, plaster board show boxes that are getting knocked up? I refuse to buy a house that I will in no way be able to resell.


I don't know for sure but I heard last night that it may be available for self builds, in which case you could specify to what level of quality you wanted the house built.

#28 gingerjon

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Posted 21 March 2013 - 09:35 AM

One glaring piece of hypocrisy from Gidion was him insisting on calling employers NI contributions a ''tax on jobs'' in the same week that IDS has been moaning to all that will listen about the spare room subsidy being called the ''bedroom tax''. You can't have it both ways.


Edited in light of Derwent's comment.

Edited by gingerjon, 21 March 2013 - 10:08 AM.

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#29 Derwent

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Posted 21 March 2013 - 10:03 AM

There's another bit of hypocrisy in that the new state subsidised bubble will not exclude buy-to-let purchases.


Not true, buy-to-let is specifically excluded from the scheme as are interest-only loans.

http://www.hm-treasu...ov.uk/10012.htm
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#30 gingerjon

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Posted 21 March 2013 - 10:07 AM

Not true, buy-to-let is specifically excluded from the scheme as are interest-only loans.

http://www.hm-treasu...ov.uk/10012.htm


That's changed from yesterday when they didn't know, then.
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#31 Steve May

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Posted 21 March 2013 - 02:23 PM

We've gone from minimum pricing to cheaper beer in a week. Joined up government.


We've gone from removing child benefit from higher rate taxpayers to giving higher rate taxpayers £1,200 a year to pay for childcare.

Joined up government? I'm not sure that Osborne and Cameron can do joined up writing.

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#32 gingerjon

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Posted 21 March 2013 - 02:25 PM

We've gone from removing child benefit from higher rate taxpayers to giving higher rate taxpayers £1,200 a year to pay for childcare.

Joined up government? I'm not sure that Osborne and Cameron can do joined up writing.


To be fair, the tax break for higher rate tax payers on childcare vouchers was always much better than for lower rate tax payers - and that was/is a system that needed looking at.

Like a lot of these things though they've taken a problem and then sort of done something in a sort of way - but not fixed anything.
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#33 Steve May

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Posted 21 March 2013 - 02:38 PM

To be fair, the tax break for higher rate tax payers on childcare vouchers was always much better than for lower rate tax payers - and that was/is a system that needed looking at.

Like a lot of these things though they've taken a problem and then sort of done something in a sort of way - but not fixed anything.


This is a symptom of the fact that everyone's financial interaction with the government is complex. You have to look at the overall package to know what the effect is. It's easy for government (of all flavours) to cherry pick the good news and sell that whilst downplaying the bad news.

Left Foot Forward has some nice charts that show the effect of the recent tax threshold changes against the benefit changes for example.

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#34 gingerjon

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Posted 21 March 2013 - 02:54 PM

It's been a reasonably politically clever budget in that we're talking about childcare, subsidised mortgages and beer rates rather than the absolute catastrophe that is the growth projections, debt and deficit.
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#35 Griff9of13

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Posted 21 March 2013 - 03:10 PM

It's been a reasonably politically clever budget in that we're talking about childcare, subsidised mortgages and beer rates rather than the absolute catastrophe that is the growth projections, debt and deficit.


Or maybe that was no more than we all expected. <_<

In other words we all have to cop this austerity and cutting lark in order to reduce the debt and deficit. However all this austerity and cutting isn't really reducing the debt and deficit because all this austerity and cutting is strangling the economy and reducing government income. It's a vicious circle, and one we don't look like breaking any time soon. :(
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#36 JohnM

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Posted 21 March 2013 - 03:31 PM

This is a symptom of the fact that everyone's financial interaction with the government is complex. You have to look at the overall package to know what the effect is. It's easy for government (of all flavours) to cherry pick the good news and sell that whilst downplaying the bad news.

Left Foot Forward has some nice charts that show the effect of the recent tax threshold changes against the benefit changes for example.


..and you usually have to wait a week or two until someone has gone through the fine print to see where the Treasury has tried to claw things back..and that seems to apply to whichever party is nominally in government.


In terms of the housing benefits changes, I do have some experience, so maybe that might be of value in shedding some much needed light.

Low income families in private rented accommodation have their housing benefit (Local Housing Allowance) assessed on a bedroom basis as it were, no matter how many bedrooms. Thus a married couple are assessed as needing a one bedroom property and the benefit is determined accordingly. The change is to put public sector tenants on exactly the same basis.

What SHOULD happen, of course, the that the councils and housing associations should work with their tenants to more accurately match tenants to properties My daughters ex husband lives alone in a three bedroom council house and has done so for over five years, even though the same council does not have properties for families that need three bedrooms. His parents also live in a three bedroom property when they would be fine in a one bedroom property. However, being state pensioners , they are not affected by the housing benefits changes.

I have long claimed that housing is the UK has been a scandal for half a century and more, not least because owner occupiers of any and all political colours have benefited from soaring house prices and subsidised mortgage rates for years, whilst those in "social" housing are generally and especially now trapped..and the gap gets ever wider.

Under the Blair governments “the number of council sales…dramatically increased and the building of social housing halted. The UK’s population grew 4.41 million under Labour but the number of social homes continued to fall. A socialist (sic) PM did not see fit to invest in social housing.”

#37 Steve May

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Posted 21 March 2013 - 03:38 PM

..and you usually have to wait a week or two until someone has gone through the fine print to see where the Treasury has tried to claw things back..and that seems to apply to whichever party is nominally in government.


Yes, it can take a while for a budget to disintegrate. At this time last year Osborne's budget was considered to be a triumph. Within a week it was the Omnishambles and he hasn't really recovered.

Likewise the now infamous abolition of the 10p tax rate was considered a Brownian masterstroke at the time and a catastrophe by a fortnight later.

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#38 JohnM

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Posted 21 March 2013 - 03:40 PM

Or maybe that was no more than we all expected. <_<


That's about the size of it...and much that was announced won't happen until April 2014 in any case. However, I applaud those measures that seek to rebalance the economy as I do the lib-dem policy to raise the personal allowance to £10k,

By why do govts of all flavours have to make things so complicated? And as for the promised investment in infrastructure, what do they mean? I hope its not about recruiting loads of civil servants to tell us that there is no money for infrastructure investment cos its all gone on their wages!

#39 JohnM

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Posted 21 March 2013 - 03:41 PM

Yes, it can take a while for a budget to disintegrate. At this time last year Osborne's budget was considered to be a triumph. Within a week it was the Omnishambles and he hasn't really recovered.

Likewise the now infamous abolition of the 10p tax rate was considered a Brownian masterstroke at the time and a catastrophe by a fortnight later.


is as if their efforts are being sabotaged somewhere by Sir Humphrey! :)

#40 gingerjon

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Posted 21 March 2013 - 03:52 PM

And as for the promised investment in infrastructure, what do they mean?


I would be genuinely surprised if he had the first clue what he means.
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