Budget June 2010

George stuck to his guns and went for defecit reduction big time! But he managed to do it in a way that seemed pretty even handed.

The increase in VAT to 20%, which some said would not happen, happened and the delay in its introduction to 2011 gives business a chance to adjust and may stimulate some spending now. Children's clothing and food is exempt and as the rich spends more it is a tax that will be suffered most by those who can afford it.

A significant increase in personal allowance will help the less well off. While the increase in CGT - less than widely anticipated - will help rebalance the government's books. I have always struggled with the notion that families with a joint income of twice the national average should receive tax credits and the threshold there was pushed down.

A 2 year public sector pay freeze will be welcome, to those in the private sector at least. The public sector now enjoys disproportionate job security, pay parity and hugely expensive pensions. While, as George said, the last 2 years have seen the private sector carry the brunt of the recession - it is only fair that the pain be shared.

It will be interesting to see if the unions decide to try and change the government's mind... and talking of fairness there's a bank levy in the offing too...