Has there ever been a budget that has been leaked so much? Budget speculation has filled the Sunday papers for the last few weekends and this Sunday was no exception with the Chancellor taking to the airwaves. Whilst Wednesday will see the formal announcement in Parliament, the surprise will be if there are any surprises left for him to announce. With a coalition Government, the dynamic is very different with much more horse trading involving the Coalition partners. With Clegg under pressure from his party he was forced to start negotiating in public although he may wish he hadn’t mooted the tycoon tax idea which didn’t last longer than 24 hours. In difficult economic times when the Government has limited flexibility and no options for giveaways, gimmicks are sometime the only options left.
So what can we expect to see? It seems likely that there will be some reduction in the 50p ‘supertax’ rate and possibly keeping child benefit intact for higher rate tax payers which whilst it will placate some Tory backbenchers who want to see the Government supporting aspiration and prosperity, there are others who think it looks elitist and sends the wrong message in times of economic austerity. The Lib Dems clearly are unhappy with both ideas and are still lobbying hard for a mansion tax, however it seems the Chancellor’s response is his plan to close the stamp duty loophole which put an end to wealthy individuals setting up companies to purchase homes thereby avoiding the tax. The Chancellor was keen to stress this was a budget for working people however if some of the headline grabbing measures are included (50p tax rate) it will be a budget remembered for the wrong reasons – supporting the wealthy not working people.