NOVEMBER 30, 2014
Budget 2015: A LOOK AT THE LATEST BUDGET
DUBAI COLLEGE
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DC ECONOMICS BUDGET 2015 Pre-election budgets have always traditionally had large scale giveaways to act as sweeteners for the electorate. However this year did not follow the trend, with the chancellor opting for several smaller giveaways. Coming out of the deepest recession in recent memory, the chancellor wanted to continue his façade of credibility which he has managed to maintain throughout his term as chancellor. It seems surprising that his approval ratings have been on an upward trend despite his failure on eliminating the budget, which is still running at 90 billion pounds a year. Not only that, but as chancellor, Osborne has overseen the longest fall in real term living standards in history. So what did he implement in this year’s budget to try and continue the trend of increasing approval ratings and further reduce the budget. His big ticket item in the budget as it was last year, was aimed at appeasing savers. This isn’t surprising considering vociferous voices calling for more support for savers following record low interest rates at 0.5% which haven’t helped. Not only this, but as is almost tradition now in pre-election budgets, parties are trying to gain the grey vote, as often it is the oldest in society who seem more likely to head to the ballot box. One measure aimed at helping savers was that the first £1000 of interest on savings will now be tax free, and the annual savings limit for an ISA has increased by £240 to £15240. However not all the measures introduced were aimed at older voters, with the introduction of a new Help to Buy ISA. Up to a limit of £3000, the government will now top up by £50 every £200 saved for a deposit for a first time buyer, aiming to solve the problem of so many young people finding it almost impossible to get their first step onto the housing ladder. However, whilst this may help in that many young people struggle to save for a deposit, he failed to address the chronic failure by the government where they have failed to build enough affordable homes, and the lack of supply has led to spiralling prices leaving many young people forced onto the private rental market. All that was announced in last week’s budget may not be implemented, as it all greatly depends on who is in Downing Street following May 7th. And with the uncertainty surrounding the upcoming general election, who knows where the British economy is heading over the coming years, only time will tell. Raahim Zafarullah
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