UK Budget 2006

[Accounting Troll]

It's that time of year again

 

My budget predictions are as follows:

 

Although the budget defecit is around £10 billion greater than Gordon Brown had anticipated, he will not give us the massive tax increases or spending cuts just yet because that would damage his chances of succeeding Tony Blair as Prime Minister.

 

There will be a few minor cuts in some taxes to make Gordon Brown a little bit more popular. Look out for a few reannouncements of planned changes that the government initially announced last year.

 

There will be some tax increases, but they will mostly be indirect taxes in order to avoid depressing "Income tax up" headlines.

 

The income tax bands will remain unchanged. As average salaries have increased over the last year, this effectively means a tax increase.

 

Income tax allowances will be increased, but the increase will be less than the rate of inflation, which effectively means a tax increase.

 

Employer national insurance contributions will go up.

 

The duties on alcohol and tobacco will be increased by over twice the rate of inflation. The government may as well cash in on the relaxed pub licensing laws

 

Petrol duties will be either unchanged or increased by but a small amount. A repetition of the national fuel blockades by militant farmers and lorry drivers would not enhance Gordon Brown's prospects of becoming Prime Minister.

 

There will be several fuel efficiency initiatives, including a few extra subsidies for householders who want double glazing and improved loft insulation. Gordon Brown will try to claim that these are entirely new measures.

 

Welfare benefits will increase in line with inflation.

 

Gordon Brown will fail to tackle the pensions crisis, although he will announce an ineffectual initiative to mak it look as if he is trying to deal with the problem.

 

Health and public transport spending will increase at a rate above inflation. The government has already committed itself to doing this, but Gordon Brown will reannounce the policy to give the back benchers something to cheer about.