Babe’s View on the Budget 2011


If I were Chancellor - this would be my briefcase of choice (The Cambridge Satchel Company Fluorescent Satchel (Pink)

Today Mr Osborne dusted down his battered briefcase and let us in on his plans for the country’s financial future, here’s my take on the Budget 2011:

The Good

Tobacco duty increased by 2% above inflation. If you’re a smoker you’ll hate me for putting this under ‘the good’, but personally, I think anything which deters people from picking up the cancer sticks is a good move. Don’t want to give the government your hard-earned cash? Quit!

The amount you can earn before tax (your Personal Tax Allowance) will be increased by £630 from April 2012, so you can earn up to £8015 before you start paying. Great news, well, for most of us really as we’ll be paying less tax on those wages we’ve grafted for.


My 10% would go to Orangutan Appeal UK

Charity begins at home with a discount of 10% on inheritance tax for those leaving 10% of their estate to charity. As someone who regularly donates to charity I love the concept of this.

Private jet users will pay passenger duty for the first time – this is just in the good section because I like the thought of smug rich people having to pay more. Oh and also if it’s more expensive they may consider more environmentally friendly ways of travelling.

No more bumpy car journeys (hopefully) with £100m set aside for repairing potholes in England.

And as a daily commuter, my personal favourite? £200m support has been pledged for regional railways in England. Please, please make sure some of that money finds its way to LondonMidland.

The Bad

Those celebratory wedding drinks are going to be a bit costlier now with a 2% above inflation rise in excise on wine and beer.

Road tax will increase with inflation (although not on HGVs). With my environmental stance you might have thought I would like this, and I would, if the government ploughed the money they earn through Road tax directly into public transport. I used to live in London where the public transport system is exceptional, and whilst I don’t expect everywhere to be as accessible as the capital, as a daily train user I can see clear deficiencies within the public transport sector and totally ‘get’ why this isn’t a feasible alternative for many people.

The Largely Indifferent

1p per litre knocked off fuel duty at the pumps from 6pm today; Incremental ‘fuel escalator’ rise of 1p per litre above inflation scrapped until 2012; Planned April inflation rise on fuel delayed until next year

These should appear under the good you say? Ah well, I’m not so sure. The government is taking 1p off the ‘fuel duty’, but considering the North Sea oil firms need to fund the £2bn which these measures will cost, and the political unrest in the Middle East, it will be interesting to see if the petroleum companies actually pass on the saving, or keep those extra pennies for themselves.

The government seems to be looking into a way of merging Income Tax and National Insurance. Babe on a Budget I might be; economist I’m not. This leaves me baffled and in slight fear of an overly expensive review process, where in the end they decide it wouldn’t work (and possibly that ducks like water) anyway.

The top tax rate of 50% is going to remain, but the government will review how much income this raises. Oh to earn enough to have to pay 50% tax (Dream on Babe).


Council Tax to be frozen. I know what you’re thinking, this is good, oui? As a homeowner, yes, I’m chuffed that I’m not paying any more to my local council. However, given the recent local council budget cuts, if I suddenly find my refuse collection cut to fortnightly, or my local library closing down, I may just wonder if things would have been different if I’d paid a little bit more.


I'm leaving on a jet plane...

From a selfish perspective the fact that there’s no rise in air passenger duty this year is great. After all we’re off to Singapore and Malaysia for our Honeymoon and are planning some long-haul trips again next year before any Babe on a Budget/Love of my Life hybrids come onto the scene. However, from an environmental perspective perhaps not so good. At least if air travel is expensive people will think twice about it and find alternatives. Although I’ll admit, I really did want to put this into the good category!

The culinary heart of our love nest, the kitchen

The culinary heart of our love nest, the kitchen

The Government are planning on giving 10,000 first-time buyers a helping hand to purchase their first property = good. The fact that this is only for newly built homes is perhaps not so good if you had your eye on that idyllic country cottage. Apparently this scheme is also only set to last one year. The BBC explains the scheme more eloquently than I ever could…

Buyers must save a deposit worth 5% of their property’s value, with the government and housebuilders putting up 10% each through an equity loan, enabling people to qualify for 75% loan-to-value mortgage.

The equity loan would be interest-free for the first five years, with interest charged at 1.75% in year six, and at inflation plus 1% thereafter.

Firstly there is a the query as to whether a 75% loan-to-value mortgage is sensible, although, as a not too long ago first time buyer I’d say it’s bloomin’ difficult to have a better loan-to-value than that if you want your own place before you’re 40! I’m also left wondering about the ‘interest-free for the first five years and then be charged a small amount of interest after that’ point. Labour launched a similar scheme when we were looking to buy but we side-stepped it as realistically we would want to save enough to pay off the ‘loan’ at the end of the interest-free period and with all of the costs that come with a new home, plus a rollicking great monthly mortgage payment each month we weren’t sure if we’d be able to do that. I guess it depends on your circumstance though – this could work out really well for some people.

Pensioners of the future could receive a £140 per week flat-rate state pension. Considering the maximum amount (not including any benefits) is currently set at £97.65 this is pretty good; but I’m convinced that by the time I’ve got my blue rinse there won’t be a state pension at all. I truly hope I’m proven wrong.

All-in-all I thought it was a bit of a non-event, although that’s just my personal opinion. What’s yours? Drop me a comment and let me know.


One response to “Babe’s View on the Budget 2011

  1. Pingback: Babe’s View on the Budget 2012 | BABE ON A BUDGET

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