There are lots of commentators looking at the Budget and the effects on the country. I thought it would be useful to have a look at how it will affect our community. Here are my views.
I see very little in the budget to be done to help residents of the Borough. The one big measure on stamp duty will perhaps make a marginal difference to some first time buyers, however this could well be swallowed up by the likelihood that the cut will actually call price rises to escalate. The real issue is that there is a shortage of affordable properties. The Barnet Eye has long been campaigning for a time limited holiday on capital gains tax for sale of second homes. Our suggestion would be a one year holiday where CGT was set at 5% for second properties, this way there would be a huge incentive. At present there are hundreds of thousands of properties which people don't want to sell as they will have to pay 40% tax on the profits. With a one year holiday on CGT on these, then there would be a huge incentive to owners to sell. They could realistically take a 10% cut in costs and still make a better profit than they would currently achieve. This would see a huge number of properties added to the market.
The real issue is that that there are not enough properties being built that are suitable for families on low incomes. We'd like to see a central government give tax breaks for developments with 75% social housing elements. We'd also like to see legislation to ensure that developers build communities, rather than just rabbit hutch flats.
In short, there was nothing for the Borough. There was a £1.7 billion regional transport fund, with nothing for London. It would have been great to see some support for the West London Orbital Rail scheme and Crossrail 2. Productivity in the UK is a major issue and transport is seen as a massive issue. Barnet has some of the Borough's most congested roads. The best solution to this is modal shift.
As a small business owner, I was disappointed with the changes. There is nothing in the budget that will help me or most of the other businesses I see at the North London Federation of Small Business meetings. The changes to VAT thresholds to £85,000 will affect almost no one. If it was raised to £500,000 then almost all SME's would be taken outside of the VAT regime and this would be a huge boost to the economy. I am pretty sure the growth and productivity this would generate would more than make up for any losses to the treasury. £85,000 generally would only affect companies with one or two employees. Its effect will be marginal.
This is a scandal. The issue for most teachers is that they can't afford to live in Barnet. There is absolutely nothing to help Barnet Schools retain the best teachers. At present Barnet Schools are doing well, but they are sitting on the edge of a funding precipice. I am the chair of a trust that funds one of our best schools. I am aware of the issues and the huge risks. London Schools are at the sharp end of a change to funding, that will help regions but massively put London schools budgets at risk. There was nothing in the Budget. Last week Councillor Reuben Thompstone, the chair of the committee that runs education in Barnet was urged to lobby Government for a better deal. He refused, therefore he must take some responsibility for the lack of action.
These are the major issues from my perspective. On a National scale, the Chancellor admitted that government policies have failed and growth is stalled. There can only really be one conclusion. If after seven years a government has failed to meet its own targets, we need some sort of change.