Besides the 10% rise in cider duty, the main story was that the fact there wasn’t really a main story. The employment guarantees of last year were only extended to March 2012, while no reference was made whatsoever to tuition fees, which is still awaiting Lord Browne’s much anticipated review after the election. This might not be such a bad thing – at least there weren’t any further spending splurges that we’ll have to pay for in the future. Nevertheless some interesting decisions did reveal themselves.
– £2 million has been allocated to the expansion of the National Council for Graduate Entrepreneurship’s Flying Start programmes to support current university students and recent graduates to set up their own businesses.
– The Chancellor also reaffirmed the government’s commitment to selling off the £25 billion student loan portfolio. The transfer in itself shouldn’t have a direct impact on students’ access to funds, nor vitally, the (interest) cost of the loan. Nevertheless, many commentators have argued that the timing is wrong. “What worries me about the government proposal is that they’re proposing to sell off in very depressed markets, under very depressed markets for land and for shares,” said Liberal Democrat Treasury spokesman Vince Cable, “The student loan book is a slightly easier thing because it’s government backed, but they’re going to get very distressed prices. This is not a good time to sell assets.”
– Another inexpensive but nonetheless important measure was the Chancellor’s decision to suspend stamp duty on homes sales below £250,000 for two years for first time buyers. Darling said that the borrowed Tory policy would be paid for by an increase to 5% of the rate on £1m home sales. Interestingly there were no promises to actually construct any affordable homes.
– Finally, alcohol and tobacco duties were raised. Cider will be hit with a duty of 10% above inflation, while wine and beer will face another 2% tax rise. Though unlikely to be translated into an immediate price rise, it will undoubtedly serve to add a further burden to the declining alcohol trade. Tobacco will also be hit by a 1% tax rise.