Who Wins In The Budget?

Right, now we've all been told what we're not getting in the future, we can start to make some assessments. Here's my rough, quick analysis, then I'll explain it a bit further. If your in the public sector you've not got much to cheer about, if your a pensioner that was pretty good listening, if your in business then that statement was also easy listening. But if your a family then depending on your income it was a painful listening.

So then, public sector. Well first off all those that earn over £21,000 are getting a two year pay freeze, and that will probably be extended further if the economy fails to pick up. However, those earning less than that will receive a £250 increase. Councils are also being urged to trim their budgets in return for the government helping them to freeze council tax rates. But this only means one thing, job cuts. Councils are already doing as little as possible in order to conserve money, so the only obvious way to trim further would be to cut jobs. The public sector pensions schemes are also getting re-vamped, but the government is still looking into ways they can be trimmed without creating too much damage.

For all the pensioners out there, all your allowances are staying, plus the link between average earnings and the state pension is being re-established. Pensions will now also go up either by a minimum of 2.5%, or in line with the retail price index (RPI). So not bad at all really.

What does the budget mean for businesses? Well Capital Gains Tax goes up to 28%, not the previously stated 50% which is nice. However VAT, as expected, will rise to 20% as of 4th January 2011 (queue cheesy VAT offers from double glazing companies!). No fuel increases, good news if your a haulage company or van driver. No cigarette increases, good news if your a smoker (RCG!). No increases on alcohol, good news for anyone over the age of 18! So not bad businesses really.

However, the family and the welfare system is the area that is hardest hit. And is also the area where the government is going to recoup most of it's money. Housing benefit has been slashed, tax credits for kids have been frozen and the threshold to apply for it lowered. There are many others I could mention, but would fill this post with more guff than necessary. The point is that this is the area which has taken the hardest hit.

So, what does this all mean if you work in the window industry? Well, if you find you get some of your custom from young families and people who work in the public sector, that area might decline. However, the cancelled rise in NI contributions means the cost of employing staff stays down, and the rise in the income tax threshold means there is more cash in everyone's pocket. If you find you get a large chunk of your business from pensioners, then that should stay the same or maybe even improve. Pensioners stand to benefit from today's budget, other than the rise in VAT, but that I don't think will make much of an impact. We could see a small rise in the older generation replacing their old windows and doors.

One other thing we are going to see is a sharp rise in 'beat the VAT' or 'we pay the VAT increase' offers from companies. It's almost expected these days. It's going to be cheesy, but it's going to happen.

All in all I think this budget has been a decent one. It's risky, but if it works, it will right a very large wrong.