Experts from moneysupermarket.com comment on the following measures set out in today’s Emergency Budget:
1. bank levy and student debt book
2. the increase to insurance premium tax,
3. landline tax abolition
1. Bank levy and student debt book
Commenting on measures outlined in today’s Budget, Kevin Mountford, head of banking at moneysupermarket.com, said: “George Osborne has today delivered a tough Budget, as was widely expected. The impact of the introduction of a bank levy has been hotly discussed in recent weeks and with the Government electing to introduce a levy from 2011, expected to generate in excess of £2billion in revenue, the danger is that overseas players will decide the UK is not so attractive a place to do business. We also fear that any costs incurred by the industry will be passed on to customers in some form or another.
“We also have concerns over the selling of the student debt book – whilst the safe management of this book is clearly not a priority for the Government, we could see some unscrupulous debt chasers emerge from the shadows so we hope the forthcoming Consumer Protection and Markets Authority (CPMA) will be watching closely.”
2. Increase to insurance premium tax
Commenting on the Budget increase to insurance premium tax (IPT), Steve Sweeney, head of car insurance at moneysupermarket.com, said: “VAT and CGT might be the ‘watch words’ for today for most Brits, but Osborne’s Emergency Budget has dealt a stealth blow to all motorists and homeowners. By increasing IPT by 20 per cent from 4 January 2011 (from five per cent to six per cent) the Government has delivered a most unwelcome hike for cash-strapped Brits.
“This measure could see more uninsured drivers on the road. Our research has already found a fifth of motorists (20 per cent) admit breaking the law by driving uninsured1, and while motorists are already suffering from premiums rising way beyond the rate of inflation, this tax rise will be very painful especially for those paying high premiums. For example, while a 40 year old male teacher from Manchester driving a Ford Focus could find their annual premium rise by £21.13 a younger driver will be hit harder and could see their premiums rise by over £133.18 a year.2
3. Landline tax abolition
Commenting on the abolition of the landline levy in the Emergency Budget, Mike Wilson, broadband manager at moneysupermarket.com said: “The landline levy seemed a little unfair to those who have a landline but no broadband. It is crucial that the upgrading of the UK broadband network continues and it is good to see the government has committed to this process.
“Back in March, the Conservative proposal on superfast broadband was billed by some as the most ‘ambitious technology agenda’ ever proposed by a British political party. Every home deserves to have fast access to what is now an essential service. BT and Virgin Media have already begun the upgrade of their networks and as funding will now come from the private sector digital switchover under-spend and BBC licence fee, the Government and Ofcom need to ensure that the roll out of a super-fast network reaches those places that need it most.”
