#Budget11 - one #coops response

The headline is that I feel this looks like a mixed-to-poor budget for co-ops and I didn't see any of Ed Mayo's wishlist in it. I look at some of the changes in detail and consider what they mean for co-ops and communities.

Because the BBC was faster at publishing details of government policy than
a government agency(!),
this is based on
the BBC coverage
more than
the official Business Link summary
but I think it's still right.

Personal

There's a £630 increase in personal tax allowance from April 2012
on top of a £1000 increase next month.
This is good for all workers, so it's good for co-ops,
but I'm not sure it's enough to outweigh the harm done
by the recent VAT rise to 20%
and the switch to Consumer Prices Index
instead of the higher Retail Prices Index when calculating tax allowances.

State pensions are under review and it's not clear how the plan will
work. That continuing uncertainty seems bad for everyone.

There's a £250m shared equity scheme for 10,000 first-time buyers, but
there doesn't seem to be any actual tax changes. This feels like it
makes benefits more complicated, which is the opposite of what this
government said it's going to do. I wonder if housing co-op members
can access that fund?

So, it's a mixed bag for co-op members and not really clear if we
win or lose. The BBC said individuals will lose about £400 on average.

Business

There are some headline-grabbing rabble-rousing special-case taxes,
such as on oil, gas and banks, which will have a small negative effect
on co-ops because those companies will probably recoup the cost
increase by making everyone pay more.

Corporation tax is being cut by 2% this year and further cuts are
promised. This is bad for any business which is outside the scope of
corporation tax - such as software.coop, which is a partnership -
because it means our competitors pay less tax.

Merging income tax and national insurance is something which annoys
me personally (because I feel that national insurance should be
managed as an insurance fund, not just another tax) but it might be
good for co-ops because it would simplify some administration.
It probably won't happen soon and there's the cost of responding
to Yet Another Consultation about this.

Research and development tax credits for small and medium-sized
enterprises will increase, which might help some co-ops, maybe
including our co-op.

The budget reports say there are going to be 40,000 more apprenticeships
and 100,000 new work experience placements.
The BIS page says
there will be 50,000 apprenticeships and 80,000 placements.
Whatever the numbers, I wonder if these will be easier
for co-ops to access than previous programmes?

That BIS page also spouts the usual nonsense
about "reducing the burden of regulation".
Without regulations, there would be no corporations: they are
artificial creations of regulation.

Basically, the business measures which I can understand are
bad for co-ops and seem to be aimed at private businesses,
but some of the other things might be useful. Have I missed something?

Transport

The penny per litre fuel duty rise due in April is to be frozen and
they won't be adding the extra penny for the next 4 years if oil
prices remain high.

Personally, I've mixed feelings on this. The
theory
of the
escalator is good: fuel duty artificially raises our prices,
which should make the UK switch to sustainable energy sources earlier than
others, so we'll be efficient when they're still trying to change.

The
practice
has been poor: that extra income should be spent on
building the alternative energy infrastructure and all parties have
failed on that so far (because that money is so tempting to spend on
other things?). The other problem is that we have only one country,
so people can't compare with what would happen without it
and people see only the pain of the extra payment.

There is another £100m for repairing potholes in England (blow that
- we need a resurfacing budget instead of more pothole patches) and
£200m support for regional railways in England

The air passenger duty rise will be delayed for a year, which seems
strange at a time when the government needs to raise money. The
coalition's tax-per-plane plan is apparently illegal, so they're doing
nothing and ranting about international law. What international law?

Land

BIS has annouced a Plan for Growth
which includes "land auctions".
At first glance, that looks like the Forests Sell-Off version 2,
but now all publicly-owned land is up for grabs.
Even worse, some won't raise money for the public
because it'll be buy-now-pay-later, giving developers a way to
borrow from government instead of the banks.
Will the response be as vocal or will they keep trying to
sell off publicly-owned land until they succeed?

One of the few ways communities can control private land,
to ensure that offices and shops are build with good transport links and so on,
is through the planning permission system. That is also under attack from
Eric Pickles announcing changes
including that the answer "should wherever possible be 'yes'".
So it can be utterly unreasonable, but if it's possible, it'll be
permitted - isn't that crazy? What sort of white elephants will be built?

Finally, there will be 21 Enterprise Zones.
I think they might help new co-ops,
but most co-ops are committed to our communities and don't want to move,
so this is another measure which will probably benefit more privateers than co-ops.
The South West regional page
says that one of the first zones will be near our co-op's head office,
so I guess I'll get to see this close-up.

The name makes me shiver: I associate Enterprise Zones with
ideas like Flying Factories. Anyone know if they'll be like that?

Overall

In
A Co-operative Budget,
Co-operatives UK general secretary Ed Mayo
asked for a change to annual tax concessions for employee share ownership, making it as easy to start a co-operative as any other form of business and encouraging grassroots successes, such as co-operative schools.

I don't see any of those in this budget. Do you?