While the sugar tax may well take the headlines, there was certainly enough in this 2016 budget to sweeten the minds of those keen to see progress on infrastructure projects with big announcements on schemes such as HS3 and Crossrail. There was also a clear indication from the Chancellor that he wants to cut the cost of doing business with reductions in everything from bridge tolls to the tax on Air B&B hosts. Some early criticism has already focused on whether the pledges are going to be achievable, but few could criticise Osborne for a lack of ambition.
A key policy for first time buyers will be the introduction of the Government supported Lifetime ISA to help them raise funds for that first deposit.
The decision to push through further school reform is perhaps a sign of the Government testing the strength of the divide opposition, but while George Osborne’s strident pro-Remain pitch for the EU will have pleased the Prime Minister, some Conservative activists will be remembering that rather than what was otherwise a budget to which they’d be likely to applaud.
Decentralisation is continuing a pace with a major breakthrough as we see not only urban metro mayors, but the introduction of mayors in rural regions. The retention of business rates will strengthen London, while people will be watching closely to see exactly what form the devolution of criminal justice to Manchester takes. A similar proposal to devolve such powers to Wales is currently being opposed by the Government.
Key points of planning relevance from the 2016 Budget:
- A new flexible way for people to save to buy their first home or for retirement is to be introduced for those under 40. The Government will support every Lifetime ISA saver by contributing £1 to their pot for every £4 saved up to a limit of an additional £1,000 a year until they reach 50
- New English devolution deals were announced with elected mayors for Greater Lincolnshire; East Anglia and the “West of England” (Bristol / Bath City Region)
- A growth deal for North Wales linking it with the Northern Powerhouse policy.
- Greater London will retain all business rates from next year
- Components of criminal justice to be devolved to Greater Manchester
- Infrastructure improvements include HS3 between Manchester and Leeds; Crossrail 2; A66 and A69
- Flood defence improvements, especially for those areas in the north of England recently hit
- Lord Heseltine to head the Thames Estuary Growth Commission
- New measures to speed up planning system
- Backing for Community Housing Trusts
- Bids are Invited for small modular renewable energy reactors
- Sugar levy to be introduced on soft drinks
- Britain currently has the highest employment in history
- Lowest proportion of people claiming out of work benefits since 1974
- Government on course for a budget surplus during this Parliament
- Global economic outlook materially weaker
- Osborne emphasises the benefits of EU membership
- A tax break for micro-entrepreneurs eg. Air B&B hosts
- All English schools to become academies
- ISA limit increased to 20,000
- Income Tax threshold raised to £11,500 and Higher rate threshold to £45,000
- Fuel duty frozen for 6th year in a row
- Action to tackle tax evasion and avoidance will raise £12bn for the country during this parliament
- Business Rates reduced
- Corporation Tax to be reduced to 17% by 2020
- Commercial Stamp Duty: will 9% will pay more, over 90% will see no rise, many a fall. Tobacco duty continue to rise at 2% above inflation
- Freezing beer and cider duty
- Abolish class 2 NI contributions altogether for self-employed
- Capital Gains tax cut from 28% to 20% (from 18% to just 10% for Basic Rate payers)
- Severn Bridge Toll to be halved in 2018