/ Money

One week until the Budget – what do you want to see?

George Osborne holding up the budget briefcase

It’s the biggest day of the political calendar and it’s only seven days away. We’ve amplified our calls to Fix the Big Six and the broken energy market but what do you want to see from this year’s budget?

The Which? Money team is looking forward to the announcement of this year’s Budget – and not only because of the challenge of keeping our online audience updated.

As consumers, we are also very interested in learning how the Chancellor’s plans will affect our approach to spending, savings and borrowing in 2014.

Now we already know that Britain’s lowest earners will benefit from a rise in the personal allowance for the 2014/15 tax year. And pensioners will also be pleased to hear the Chancellor is set to confirm that the state pension will rise to £113.10 a week.

But the majority of reports regarding Mr Osborne’s speech are purely speculative until Budget Day, where we’ll be rounding up the latest stories in our Budget Hub.

Our asks of this year’s budget

At the Autumn Statement, the Government listened to our calls to ‘Cut Them Down George’ and started to tackle energy bills with an announcement to cut the cost of levies, saving households an average of £50. We believe the next step is to deal with the Carbon Floor Price.

The Carbon Floor Price is a tax that energy generators have to pay on the carbon they emit when they use fossil fuels to generate electricity, which increases the wholesale price of energy. The companies pass on this increase to consumers in their bills. We’re calling on the Chancellor to at least freeze the Carbon Floor Price in his 2014 Budget; and ultimately we would like to see it scrapped.

Your demands of the budget

In previous years you’ve told us you’d like to see commitments on wages, pensions, Isas and personal allowances. A number of shared your worries as you approached retirement age, as Nigel B told us:

‘I will reach State Pension age in March 2017. When the flat rate pension was first announced in January 2013, I thought I had escaped its clutches. Now I am caught. I understand that current entitlement will be preserved, but on the other hand I will now need 35 years NI contributions rather than 30, so the basic element will be cut. I gave up work in 2006 thinking I had the necessary minimum.’

What do you hope to see announced in this year’s Budget and how do you think your personal finances will be affected?

Robert Dimmick says:
14 March 2014

One good thing would be a budget that destroys the remains of the Coalition’s reputation and ensures a smashing Labour victory next time.
Failing that, I want to see a budget that provides the money for high quality public services, particularly a NHS able to keep up with increasing demand and advancing technology, that boosts real production in the economy, and that protects and supports the poorest. No income tax cut can do that for those who earn too little to pay it, so we need a cut in VAT. Borrow in the short term to generate productive investment in the long term. Increase the top rate of income tax and impose a mansion tax. Introduce effective death duties.
In memory of Tony Benn, think what he would have done, and do it.

Stuart says:
14 March 2014

Can I vote for just the opposite of that?

Seriously best thing would be to move the 45% tax band from 150K to 100K and stop the tappering of the tax free amount when you earn > 100K. The net effect of this is a slight tax cut to people on 100K and a slight tax rise to people on 150K (so this pays for itself) – but also reduces a lot of complication and another silly marginal tax rate.

There is always pressure to take more people out of the tax net by raising the personal allowance threshold, and in general this is a good thing. However, because there is a pyramid of earnings it means that giving more relief at the base of the pyramid [which includes every single taxpayer], and recouping the lost revenue from the people higher up the pyramid to achieve fiscal neutrality, always tends to affect those in the middle of the stack disproportionately more than those at the top, largely because the middle belt of the pyramid is quite broad and gives a good yield; the highest earners sometimes seem to be untouchable or have numerous ways of padding their cushion to soften the blow. VAT doesn’t help much either in redistributing “wealth”: It is highly regressive so it bites those with the lowest incomes much more than those with more disposable, and people at the top of the earnings pyramid pay VAT on a relatively small percentage of their overall expenditure because much of it can be put into property or investments or taken abroad. Balancing all these counter-acting movements within the confines of personal taxation while still pulling in enough to fund the public services is an extremely difficult exercise and at the end of the day it comes down to the political philosophy of the party in power. Personally I hope the next budget will carry on remedying some of the structural weaknesses in the UK economy and in the performance of all the public services so that eventually the overall tax take can actually be reduced as a percentage of GDP.

Kevin Nunn says:
14 March 2014

I think small business rates and transportation costs should be slashed. So many businesses struggled go under. If their rates were slashed then the government could still tax their profits which would rise, but if they could offer secure employment to their staff, the staff could risk spending more money, so putting more money back into the economy. Help the people and businesses who keep their money in this country, not those who send it to foreign tax havens
Also high street shops are at an disadvantage trying to trade against internet only traders. The high street traders pay taxes and rates left right and centre, whilst internet traders pay only a pittance in tax. Level the playing field so the high street can keep shops open and help the economy.”
As for transportation costs, if road haulage became cheaper then all goods in shops, could be brought down in price. This would then ease the cost of living.

Cllr Reg Corns Birminghma City Council says:
15 March 2014

I do believe a complete review of our pensions and how they are paid either annuities or sipps Even company pensions
should become inheritable. Not the capitol but the income
Our children will be having one hell of a time when they retire the rightto inherit the pension pot divided between the children seems a way forward .

That’s an interesting idea. We could capitalise the unpaid personal pension payments over the remaining life expectancy of the deceased and add it to their estate [possibly taking it into the inheritance tax bracket]. And of course, the beneficiaries of those who outlived their actuarial term would have to pay some back. I wonder if this could be done without raising individual pension contributions or giving superannuation fund trustees sleepless nights as they try to keep their funds afloat.

The Local Government Association has also come up with a novel wheeze which it thinks the Chancellor should pick up in his stride. “Why don’t we cut out the single person council tax discount for well-off people who live in high-band houses on their own?” They say it would release £200m – in their dreams! – which means they could “protect discounts for struggling families and those who need it most”. The notion that the ‘wealthy bachelors’ (as the LGA describes them) will not so adjust their affairs that they escape this clawback is patently unsustainable. Could this be done without another means test and a complex bureaucratic process? Have any checks been made to see what kind of people are in solitary occupation of properties in Band E and above? Or is this just another piece of hare-brained crackpot municipal nonsense?

Mike says:
17 March 2014

Doesn’t matter what he does. The rich will still get richer and the poor poorer! Think about it who’s paying for the last big crash not the rich and especially not the Bankers.
Watch out everybody look what happened before the last crash Bankers massive bonuses Housing prices soaring! Have we not learned the lessons, we’re in for another big fall no matter what he does and who will be left picking up the pieces again ?

Frustrated says:
17 March 2014

I want Georgie boy to get the economy working. The truth is we live in a pump up economy; All financial products are designed to convert resources in the material economy into wealth which is pumped up into the financial economy. Sadly the world believes in trickle down and has flooded the financial economy with cash via quantitative easing. Why would anyone in the financial world get out of bed to prime the economic pump when they can wait for cash to be showered on them via quantitative easing? Georgie boy and all other economists need a new paradigm which gets money working. Throwing money at the top has stimulated the financial economy but done little for the material economy where most people live. The best we can say is the debt has now been shared with China and other emerging economies.

T Da says:
19 March 2014

Vat registered small businesses compete with those not register for vat businesses and have a major disadvantage. Every other tax has an allowance before it is paid – capital gains, income tax, NI contributions, etc. I would like to see this extended to vat. The current threshold is £79000 per year. Once a business has turnover over this figure it becomes less competitive than other businesses that don’t pay this tax. Hardly an incentive to grow your business!