£12.5 Billion to Spend?

Temporarily cutting the VAT rate to 15% will cost taxpayers in the region of £12.5bn. The government's stated aims in doing this are to give consumers a little bit of extra cash to spend, in the hope that this will stave off some of the recession. Clearly, it's far to early to tell whether this has actually worked, despite what many people who are opposed to the idea think, but that doesn't make it a good use of such a large sum of money. Is there a better way to spend it to try and achieve the same aims? I happen to think so and will come on to my ideas in a moment but first, what is wrong with the current policy?

Well, disregarding a higher tax burden in the longer term, there are more fundamental problems with it. For a start, it's not exactly a fair distribution of taxation relief, is it? Those who can afford to spend the most get the most extra cash. While it's true to say that the richest are probably suffering most in the recession, there's no reason not to target this enormous pot of money more effectively. Related to this is another issue: because everyone benefits from it (and some benefit much more than others), a large percentage of people don't benefit very much, so it may not increase spending across the board.

What could be done instead? How about combining the aims above with others, particularly related to climate change? What sort of schemes would save people money, stave off the recession and help to reduce the country's carbon emissions?

Here's one such proposal. Given an average cost of £4000 (ignoring any savings related to the economies of scale) a time, how about installing solar water heating in three million homes? It would save people money (not just now but year on year in the long term), help to create jobs in manufacturing and service industries at a time when it is needed most and reduce our reliance on fossil fuels to heat water, thus helping to combat climate change. And, maybe best of all, it could be targetted at the people who can least afford to do it themselves.

Can you think of other ways to spend such a large amount of money to the benefit of the country and the environment, too?

Gis a job

How about this for a job advert?

What's the betting you don't need to apply in writing for that one? Just click on the Apply Now button and wait.

Twenty minutes later there's a knock at the door.

"Ah, Mr Skies. We've been expecting you."

Transferring Inheritance Tax Exemptions

This may seem a deathly boring (pun intended) subject but since I don't have many readers to bore in the first place and BW specifically asked anyway, here it is.

I finally managed to track down some specific information, with examples, about the how the new threshold is calculated when unused inheritance tax exemptions are passed from one spouse (or civil partner - can't be seen to be discriminatory, can I?) to the other.

Essentially, what you get is the unused proportion of your spouse's exemption, multipled by the current exemption, which is then added on to your own.

So, regardless of the fact that the exemption was only £64,000 when my grandfather died, since he left all of it to my grandmother, 100% of the exemption was unused and therefore, at today's rates, his exemption is worth the full £312,000. And since her estate is worth nowhere near £624,000, we won't be paying Mr Darling anything at all.

If, on the other hand, he had left £32,000 to my mother when he died then he would have used up half of his exemption and the unused part would now be worth £156,000.

Simple, really. I just wish it was a little more obvious in all the commentary written about it when the change was announced.

The Year Ahead

I seem to have had less time to myself over the last couple of weeks and during the little I've had, I've been far too tired to think about writing anything. So, where was I?

Ah, yes. Plans. Big ones at that. More on that in a minute but first some background and a catch up.

My grandmother's funeral went very well. Despite having a very small family (she was an only child, as is my mother), around 40 people attended the service at the crematorium, which made it into a much more meaningful affair. Mum read the eulogy, which was full of little nuggets that brought back special memories of her. Suffice it to say that it was very emotional.

She had been heavily involved in local politics for decades and was the chair of the Conservative association for many, many years until she gave it up in 1999, at the age of 79. So we expected a few councillors and other local political connections to be there. And they were, along with the MP for the constituency, even though he was first elected in 2005 and only knew of my grandmother "through legend". Okay, the funeral may have been a couple of days after the parliamentary Christmas break began so he didn't have as much on as he would have a couple of weeks earlier, but he came on to the reception and was among the last of the guests to leave, two hours later. Definitely beyond the call of duty.

With that over and done with, thoughts naturally turn to what to do with the estate and this is where the plans all stem from. You see, my grandmother, while not what you would call rich, was certainly well-off. Enough to make us glad that Mum could lay her hands on her father's will and prove that he left everything to his wife, so we won't be paying any inheritance tax. And because the family is so small, once Mum has taken whatever she believes she needs, the rest will be split three ways. The numbers are still up in the air at the moment but it's likely to be roughly the same as two year's salary for me; a significant sum.

So all of a sudden, we don't really need to worry about tightening our belts in these uncertain economic times. In fact, we planning on taking advantge of them and spending tens of thousands on improving our home and garden, hopefully all this year so that we can get away with paying 15% VAT - I'm now something of a fan of the reduction, although I don't believe it's working more generally. There should also be enough left to allow us to replace the car and to pay a lump sum off the mortgage.

More details, at least, those I'm prepared to give out - you may have noticed the above is a little light on facts, on those plans as they develop. For now, all that remains to say is that, if everything goes to plan, 2009 will be the year that our lives and our finances become more comfortable and secure. And how many people at the moment can say that?

Happy New Year

Here's hoping that 2009 will be a good year for all of you. It certainly promises to be an interesting one around here as big plans are afoot. More on that to come soon.

Greetings of the Season

Merry Christmas to you all.

Plenty to say

Just no time in which to say it. Or, more to the point, to compose it into legible, well structured and, hopefully, interesting sentences.

In about an hour we're off to spend Christmas with my parents and we haven't finished packing yet so news of how last Friday went, plus our plans for 2009 will have to wait for now.

And then they came

So far my composure has held up reasonably well but last night saw the first small cracks.

L came into the room and said that she's got to pick up the photos of Cirrus we've ordered from the nursery when he's ready to go back this week. And that she doesn't know what to do with the fourth copy.

It took me a couple of seconds to remember why we might now only need three and then the tears came. A couple at least.

I might take a pack of tissues or two to the funeral on Friday.

A pox on all of you...

...or on all of Cirrus, at any rate.

I'm at home today, having booked it off weeks ago because it's L's work's Christmas lunch and the second performance of the Christmas Play at Cirrus' nursery (the first having been yesterday, which L was going to see).

The trouble is, Cirrus, like a significant proportion of the rest of the cast, has come down with the dreaded pox, so I won't be seeing him dressed up as a shepherd or hearing him sing the songs he's been absent-mindedly practicing for the last couple of months.

What is it about chicken pox that makes people so worried? I mean, at the first sign of it the nursery packs an infected child off home to try and stop it spreading further. But is that such a bad thing? I mean, sure, it's not a terribly nice illness, with the open blisters all over you, but it's not as if it it lays kids up in bed or makes them feel more than a little off-colour. And it can be much more dangerous, for a man at least, to get it later in life as it can cause fertility problems. So you'd think that you'd want kids to have it when they're young. Or am I missing something?

Anyway, Cirrus has spots all over him (including one on the edge of one of his eyelids) so I've got to stay at home with him (and Nimbus, of course) watching DVDs all day. It's a hard life.

A Farewell

It won't be long now. That's the message that makes work seem suddenly unimportant. All I can think of is getting there before it's too late.

It won't be long now. Waiting impatiently at the station, I read to try and distract myself. Finally the train leaves. Half an hour and I'll be there.

It won't be long now. On the bed is a woman who lost her husband almost a quarter of a century ago and kept her illness secret for many years. Her family is gathered around her, waiting, thinking.

It won't be long now. Her breathing is rapid and shallow and we wonder whether she knows we are all there. My mind drifts to memories of trips into London during school holidays. Can the last of those really have been almost half my life time ago?

It won't be long now. Eventually, I say my goodbyes and take my leave. There's no reason to stay right to the end. I'm just glad I was able to be there to see her before she left. Now starts the wait until the phone rings again with that last, fateful message.

It won't be long now. And then the tears that stubbornly refused to come during that long afternoon may begin to flow freely.