Today the Chancellor, George Osborne, announced his eigth budget. The summary of the measures announced are as follows
The state of the economy
George Osborne announced that growth forecasts are being revised down for next three years.
Growth is forecast to be 2% in 2016, down from 2.4% in November’s Autumn Statement.
GDP is predicted to grow by 2.2% in 2017 and 2.1% in 2018, which is down from 2.4% and 2.5% forecast just four months ago.
The outlook for the global economy is “materially weaker” and UK “not immune” to slowdown elsewhere.
The UK will still grow faster than any other major Western economy.
A million jobs is forecast to be created by 2020.
Inflation is forecast to be 0.7% for 2016.
Health, Social and Education
There will be new sugar ‘tax’ on the soft drinks industry to be introduced in two years’ time, which is expected to raise £520m which will be spent on primary school sport.
The levy is to be calculated on the levels of sugar contained in sweetened drinks produced and imported, based on two bands. However pure fruit juice and milk-based drinks will be excluded.
Secondary schools in England to bid for new funding for extra-curricular activities such as sport and art.
It is also planned for 25% of secondary schools to stay open after 15:30 and ALL schools in England to become academies by 2022.
All pupils to study maths until 18.
£500m to ensure “fair funding” formula for schools in England.
Libor funds to be spent on children’s hospital services, specifically in Manchester, Sheffield, Birmingham and Southampton.
Public Sector borrowing/deficit/spending
There will be further spending cuts of £3.5bn by 2020.
Public spending, as a share of GDP, will fall to 36.9% by 2020.
Debt targets are expected to be missed. Forecast debt, as a share of GDP, is being revised up in each of the next five years to 82.6% in 2016-17 and 81.3%, 79.9%, 77.2%, 74.7% in subsequent years.
Debt is expected to be £9bn lower in 2015-16 in cash terms
The deficit as a share of GDP is projected to fall to 2.9% in 2016-17, 1.9% in 2017-18 and 1% in 2018-19.
The Tax-free personal allowance to rise to £11,500 in April 2017 and, at the same time, the threshold at which people pay 40% tax will rise from £42,385 to £45,000.
Capital Gains Tax to be cut from 28% to 20%, and from 18% to 10% for basic-rate taxpayers
There will be a 0.5% rise in insurance premium tax.
Alcohol, tobacco, gambling and fuel
Fuel duty to be frozen for sixth year in a row.
Beer, cider, and spirits duties to be frozen.
Other alcoholic drinks, including wine, will be increased by the rate of inflation.
Excise duties on tobacco to rise by 2% above inflation.
Pensions and savings
Annual Isa limit to rise from £15,000 to £20,000
New “lifetime” Isa for the under-40s, with government putting in £1 for every £4 saved
There will be a new state-backed savings scheme for low paid workers which will be worth up to £1,200 over four years.
The Money Advice Service, which has provided financial advice to consumers since 2010, is to be abolished.
The headline rate of corporation tax, which is currently 20%, will fall to 17% by 2020.
Anti-tax avoidance and evasion measures is expected to raise £12bn by 2020.
The annual threshold for small business tax relief will be be raised from £6,000 to a maximum of £15,000. This is expected to exempt thousands of firms from paying business rates.
The supplementary charge for oil and gas producers to be halved from 20% to 10%.
Petroleum revenue tax will be “effectively abolished”.
There will be £9bn raised by closing corporate tax loopholes and tax minimisation schemes.
The use of “personal service companies” by public sector employees to reduce tax liabilities is to end.
The commercial stamp duty 0% rate on purchases up to £150,000, 2% on next £100,000 and 5% top rate above £250,000. There will be a new 2% rate for high-value leases with a net present value above £5m. These measures will be effective from midnight tonight (17/03/2016).
Housing, infrastructure,transport, regions, and energy
The proposed new rail lines to get the green light, including Crossrail 2 in London and the HS3 link between Manchester and Leeds.
There will be more than £230m earmarked for road improvements in the north of England, including upgrades to M62.
There will be £700m set aside for flood defence schemes.
Tolls on Severn River crossings to be halved by 2018.
In Scotland, Libor bank fines will be used to pay for community facilities in Helensburgh and for naval personnel at Faslane.
There will be new elected mayors for cities and towns in southern England.
Disability benefits bill to increase in real terms.