In Feb 2011, I suggested that the Chancellor, in his March budget, should bring forward the tax cut of 2014 to 2011 i.e. reduce Corporation Tax by 2% in 2011. This is because 2011 will bear the brunt of the Austerity Measures which are due to start from April; and we won't need a tax cut in 2014 as, by then, the economy would be on a firmer footing. I didn't follow the Budget and didn't find out what he actually did.
However, I googled "corporation tax cut 2011" and found one article on the BBC business news website:
"Corporation Tax will be reduced by 2% from April 2011, rather than 1% as previously intended, and fall by 1% in the next three years, to reach 23%".
Anothre feather in my cap - he actually followed advice and the economy is on a firmer footing well before 2014 i.e. industry won't miss any tax cuts. Besides they had it in 2011. Unfortunately, my celebrations were curtailed by the "Help to Buy" scheme as many economists believe it's the stimulus industry have been waiting for.
However, economic analysts are split into 2 camps: those who see it as a bubble that will burst when the Help to Buy scheme ends in Dec 2014; and those who see it as a sustained recovery since all sectors of the economy are recovering. Even the CBI waded in by saying that it's the right kind of recovery. The pessimists think that growth in 2015 would fall back to 1.9% when the Help to Buy scheme finishes. My view is that this is a real recovery and that I'm hoping for GDP growth of 3% in 2014 and 4% in 2015.
As usual, my predictions are being dismissed. Think about it, 1.9% isn't that far away from 3% and we've achieved a sustained 3% in the past and America has grown by 3.2% in 2013. Can't we repeat that in 2014?
Till the next time, have a nice recovery.
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