“We welcome the move to bring insurance premium taxes level, because it’s done away with the discrimination we’ve been suffering for the past 12 months [it came into force last February], says Keith Betton, head of corporate affairs at the Association of British Travel Agents. “Travel agents previously had to pay 17.5 per cent while insurance companies only had to pay four per cent. We’d love to have seen it fall across the board to four per cent. It means customers will be prepared to buy travel insurance from tour operators and travel agents”…
…but not everyone agreed. “The people who will end up getting hit by the increased insurance premium tax will be the travellers going to higher risk and more far-flung locations,” says Peter Timberlake, marketing manager at Legal & General, which must now pay the full 17.5 per cent. “It is important that people do not think of skipping paying insurance.”
Betton’s happiness is also unlikely to be shared by the electrical retailers which were so badly hit in Kenneth Clarke’s final Budget when insurance premium tax was set at 17.5 per cent. Brown failed to harmonise the rate for the likes of Dixons and Comet, allowing insurance companies to still sell insurance on electrical goods at a lower rate of tax.
Others were concerned with the lack of support for manufacturers struggling with the strong pound. “Those in manufacturing trying to sell goods abroad who have big budgets and deep pockets should be able to live with the situation,” says Bob Willott (left) of accountant Willott King-ston Smith. “But those without a big budget may find it difficult to spend on advertising.”
“Mr Brown is green at the edges but he needs to be green at the core if the Government is to deliver on its environmental promises,” says Charles Secrett, director of Friends of the Earth. “In its manifesto the Government promsied to ‘put concern for the environment at the heart of policy making’. There is no way the Treasury has got this message. It doesn’t understand.”
“Green taxes on car travel may persuade some people to travel by air instead to say Scotland,” says easyJet sales and marketing director Tony Anderson. “I would also say that anything that puts more money in people’s pockets is good news because it could open up a new market of people who don’t normally fly.”
“They are strangling the golden goose that is laying the golden egg,” says Chris Ogden, executive director of trade affairs, Tobacco Manufactures Association of the 20p price hike on 20 cigarettes. It was a view shared by Imperial Tobacco if not put quite so eloquently. “Yet again the Chancellor has imposed a delayed duty increase to come into effect in December – just in time for the Christmas smuggler’s bonus,” says an Imperial spokesman. “The criminals supplying the black market will make millions. Controls on sales to children will be lost as the market is driven further underground.”
There was a sense, among some analysts, that the budget could have done more to influence the general economy. “Interest rates may need to edge up – the Budget has not done much to hold or reduce rates,” says Andrew Kasoulis, food retail analyst at SBC Warburg Dillon Read.
The final comment should go to the unnamed source at a car company whose only response was: “Fxxking relieved.”