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The Budget


As I sat watching the Chancellor yesterday on TV, headphones on listening to the radio coverage to drown out the howls of derision hurled at the screen by some of my colleagues, something interesting happened.

It wasn’t the fact that the Labour front bench had made a fashion statement in purple rather than traditional red, nor was it that I started to nod off during a speech that was long on politicism and short on content. Actually it was the sudden realisation that maybe I have finally fallen out of love with politics, something I have always been passionate about.

Considering the circumstances the Chancellor did alright, actually it was his finest hour. Yes I know much was pure election broadcast and shouting “at least we were better than you’s lot” and by heck it was long, mostly dull and did I mention long? But at least he looked like a Chancellor.

As one of my colleagues mentioned, the only good thing about it being long was that it may mean less time for George Osbourne, (and that from a Tory voter!) Although interestingly Mr Cameron himself led the response!

Darling, however, delivered his lines to perfection, playfully stealing the Tories Stamp Duty holiday for first time buyers up to £250,000 and then putting on his Robin Hood hat to hit everyone with the sting in the tail for anyone looking to purchase a property over £1m to pay for this.

The comic timing displayed over the tax treaties with other countries, delivering the word Belize with just the right amount of zeal, was priceless.

There were no real giveaways, after all how can you give anything away when there is nothing in the cupboard to give away?

Amongst the political nonsense there were only a couple of real points to note.

Obviously stamp duty will get most of the headlines with a long-awaited call for it to be abolished below £250,000 finally being delivered, albeit only for 1st Time Buyers and only for 2 years. Whilst this is welcome there are already some issues around the definition of a first-time buyer and how it is going to be policed.

It would have been much easier to apply it to everyone buying under £250,000, although in my opinion a major overhaul of how stamp duty works across the board would still be the best option, tiering it and applying it like income tax for example.

When taken together with the raising of stamp duty to 5% on properties over £1 million, this could mean that an interesting bubble of opportunity has been created. We could well see another mini-boom post-election until the end of the year as people take advantage of both these scenarios. Expect stamp duty mitigation schemes to explode in popularity!

Apart from the usual banker bashing that is inserted into every political speech nowadays, it was interesting to see that Government backed banks will be forced to lend a further £94 billion to individuals and businesses.

On the face of it this looks like good news, but close analysis of the figures may show something different. First of all the question is where will this money be directed? In the past, on the mortgage side at least, it seems to have gone towards those who are not struggling to get finance at low Loan-To-Values when actually it is needed at the 80% – 90% LTV levels. Also, when the actual mortgage figures are identified, is this just the same level as last year?

At least the Mortgage Support Scheme will keep running, so another 15 homeowners will be relieved!

Then we have the deficit, ah the deficit. It’s not as bad as you think guys, £167 billion rather than £178 billion, how good are we?

This is undoubtedly the scary bit. Not so much the size of it, but sitting through the agony of a Newsnight discussion where both Labour & Conservative representative looked beyond clueless about how to tackle this issue made me realise what a stark choice we have. Only Vince Cable spoke any semblance of sense and this is the heart of the political problem at the moment.

Much as it pains me to say it does seem like it is time for a change. I do not doubt that Brown was the right person to get us through the last couple of years and at heart he is a decent man, plagued and obsessed by politics and opinion polls more than any other leader, but is he the man to get us all going again?

One cursory glance at the nodding dog beside Mr Darling suggests not.

So yes, it is time for a change and a bit of youthful spirit to re-energise our political fairground, even though I am not sure Mr shiny Cameron actually stands for much. We needed Maggie after Wilson & Callaghan, we needed Blair to re-invigorate after Major and too many years of Tory rule and now, after the dour Scot we need fresh impetuous.

For me the issue is that there should be a straight two term maximum for any PM. It happens to all governments in that after too long holding the reins of power people take it for granted and much of the Labour party are tainted with too many years in power.

Cameron does have a real chance, especially  if he finds a proper Chancellor, (fresh faced is one thing but Osbourne looks and acts like a naive schoolboy), and he can do a lot worse than testing Mr Cable and offering him the job!

For me, the televised debates will be absolutely decisive and if Cameron performs like he did yesterday at the dispatch box he will walk in.

My fear is that actually the best Government to handle the situation is already in power. They just have the wrong leader and half of the cabinet you would not trust with £10 of your money.

Come to think of it, perhaps the best option is a hung parliament, working together with one goal to get us out of this mess with the best of each party in the cabinet. But then I always was a dreamer!

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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