Budget 2013 :: Gaeia commentary

At Gaeia, as financial advisers specialising in ethical investment we are interested in two key aspects of the budget, as well as the overall financial/business impact a)      Will it help create a stable, fairer society where basic needs are met; all have a stake in the economy with quality jobs being created? b)      Does the budget give a practical stimulus to socially useful and environmental/renewable energy enterprises or sectors to help them grow? Like many commentators we don’t consider that this budget will help the economy in either a conventional or socially useful sense. The positives Raising the personal income allowance to £10k for all will provide some relief to the very poorest - but still mean many low earners pay tax yet cannot afford to heat their homes properly or feed their children adequately. Tax relief for business owners who sell firms to their employees – this is something that, as members of the Employee Ownership Association, our MD, John Eckersley, recommended to the Parliamentary Select Committee a year or so back so good to see Government support and some action promised  there.  However, we don’t believe that tying employee s to share ownership to losing employment rights is fair or workable and the House of Lords has same view! Negatives We believe that the government continues to ignore or under use significant initiatives that could help society, the environment and the economy. Housing Millions of people are on housing waiting lists, unable to find suitable accommodation, let alone afford to buy. Perversely, “Help to Buy”, the mortgage assistance program, is likely to keep house prices up or push them even higher.  The sums allocated to social housing are woefully inadequate where there could be a much greater stimulus to the social housing sector e.g. bonds underwritten by the government or with tax breaks, could house the low paid, create quality jobs, speed up environmental efficiency in new build or renovation, keeping energy bills down AND take some of the pressure off private housing, keep prices saner! Home ownership is a worthy ambition but with so many people working in low paid or part time work – buying their own home is not a realistic goal. Environment Tackling climate change and soaring energy bills/ Renewable energy. We haven’t seen any positives on this front and again, so many missed opportunities in the sector, to create quality jobs, make UK energy supplies more secure, home generated. The government incentives for shale drilling will blow away our carbon reduction targets and cause further rise in earth temperature.  This comes on the same day as government announced separately news of the EDF contract to build a new nuclear power station, once the price of energy generated, has been agreed. Summary We don’t see enough in the budget to tackle the UK’s social and environmental problems and it is hard to discern stimulus to the related sectors that could boost jobs, the economy and would be popular with ethical fund managers and our clients.   SBBLOG/220313