A local expert's reaction to the 2013 Budget

Oh dear! How much worse can it get. The Chancellor has got a real problem, a complete lack of growth in the economy and debt not coming down. In only June 2010 he forecast borrowing in 2015/16 to be £20 billion. He now estimates this figure to be £87 billion! Debt was to peak previously during 2014/15 but instead will now peak in 2016/17 and at a much higher level. Austerity has been pushed out by a further two years

Growth forecasts for the economy have been reduced again but perhaps the good news is that we should avoid a recession at the next quarter’s release of figures. I bet we do it only just.

What does this all mean for the economy of Exeter and all of us? In essence nothing will change. The spending squeeze that we are all noticing will continue. Workers in the Public Sector, on which the City heavily relies, will see only a small increase in the wages, whilst those on benefits will continue to be squeezed.

Trying to be a little more positive the scrapping of the Fuel Duty increase and the removal of the beer escalator are headline grabbing but will not transform an economy in dire economic straits. The increase in the personal tax allowance to £10,000 from next April will help local economies such as ours where wages are below the national average and the National Insurance Contribution for employers being reduced will also benefit the region. The news regarding Help to Buy and the Mortgage Guarantee scheme will help house buyers looking around Cranbrook, but in reality this is a budget constrained by a lack of growth in the economy and higher borrowing. The end is not yet in sight!

Paul Lewis, Chartered FCSI and Branch Director and Investment Manager of the Charles Stanley Exeter office