Budget March 2016

BBC News summarised the main points from Chancellor George Osborne’s Budget statement as follows:

To read the full report click here

• George Osborne kicked off with upbeat comments about the UK economy:strong, growing and resilient “because we did not seek short-term fixes”, he said.

• Mr Osborne warned that storm clouds aregathering over the global economy, whichis why he chose “sound public finances to deliver security” amid the uncertainty.The outlook is “materially weaker”, he said, citing the Office for BudgetResponsibility forecast.

• George Osborne said the Office for Budget Responsibility has forecast that the UK economy will expand by 2% this year, 2.2% in 2017 and then 2.1% in 2018, 2019 and 2020.

• The Chancellor added that this growth would be faster than any of the major development economies. However, it is still a downward revision.

• Mr Osborne also said the growth figures are predicated on the UK remaining in theEuropean Union – a stance he supports.

• The Office for Budget Responsibility has downgraded its forecast of UK economic growth in 2015 from 2.4% to 2.2%.

• Figures are also revised downwards for the following years – from 2.4% to 2% in 2016, from 2.5% to 2.2% in 2017, from 2.4% to 2.1% in 2018 and from 2.3% to 2.1% in both 2019 and 2020.

• Despite a downgrade to the UK’s growth forecasts, Mr Osborne seemed bullish on jobs. He said that the OBR is forecasting another 1m jobs created in this parliament. The Chancellor added thatthe forecast shows real wages would continue to rise.

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• Mr Osborne said the government is announcing changes to the disability budget. Even so, he said, spending on disability is rising, and is higher than under Labour.

• Sterling has taken a bit of a tumble in response to the OBR’s downgrade of theUK’s economic growth forecasts through to the end of this parliament. The pound is 0.6% lower against the US dollar at $1.407. It is also down 0.34% against the euro at €1.270.

• Missed debt targets – the new debt and GDP forecasts mean that the Chancellorhas missed his target of starting to cut the national debt, as a  percentage of output, this financial year. According to the OBR that now will not happen until 2017-2018.

• Mr Osborne announced a corporation tax cut. It was 20% at the start of the parliament. By 2020 it will fall to 17%.”Britain is blazing a trail, let the rest ofthe world catch up,” the Chancellor said.

• The Chancellor announced a series of actions to tackle tax avoidance andevasion totalling £12bn, including moves to end the use of “personal service companies” by public sector employees to minimise their tax liabilities. A number ofTV personalities have faced criticism for their use of the tax loophole.

• The Chancellor announced that from 2018, employment termination payments over £30,000 will be subject to employer’s national insurance contributions (under £30,000 is currently free of tax).

• Mr Osborne repeated his mantra that “we are all in this together” as he said figures confirm the richest 1% paid 28% of income tax revenue. Insisting that theGovernment was acting “in a fair way”, he said: “Child poverty is down; pensioner poverty is down; inequality is down; and the gender pay gap has never been smaller.”

• The Chancellor announced tax cuts for the oil and gas industry. Petroleum revenue tax is effectively abolished -something that is only affordable because Scotland has remained in the UK.

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• Tolls on the Severn Crossings between England and Wales are to be halved by 2018, the Chancellor announced.

• Reforms to business rates that will mean 6,000 small businesses pay no rates and 250,000 have their rates cuts from April 2017 were welcomed by loud cheers from Conservative backbenchers. Mr Osborne said: “This is a Budget for small businesses.”

• Insurance premium tax to rise by 0.5% to 10% with proceeds diverted to floodrelief. The tax was already increased last year, from 6% to 9.5%. But insurance premiums have been falling after a crackdown on so-called “ambulance chasers” and personal injury claims.

• A sugar levy will be introduced on soft drinks. It will come into force in 2018 togive the industry time to adjust, the Chancellor said. The £520m it is expected to raise will be used to help support school sport.

• The Chancellor announced measures in the Budget that he said would see “big tax cuts for small firms”, with new rates for commercial stamp duty. He said it followed the success of stamp duty changes announced in a previous budget for people buying homes.

• The Chancellor is freezing fuel duty. He said the move means a £75 a year savingfor the average driver: It’s “the tax boost that keep Britain on the move.”

• The Conservative government will spend more in real terms on disability payments than any Labour administration, George Osborne has said. Delivering his Budget,he told MPs that the money would be “better targeted” at those who needed it most, and that the budget would rise by more than £1bn.

To read the full report click here

• The Chancellor turned to something dear to many people’s hearts:

• Beer duty and cider duty to be frozen.

• Duty on whisky to be frozen.

• Other alcohol duties to rise in line with inflation

• The end of the 3.30pm school bell was confirmed by the Chancellor, with fundingfor activities including extra sport in England. Mr Osborne said he hoped the devolved regions would follow suit.

• He also said that fines from the Libor financial scandal would be used to helpsupport children’s hospital services in Manchester, Sheffield, Birmingham and Southampton.

• George Osborne name-checked his Northern Powerhouse proposals as heannounced the HS3 rail scheme and widening the M62 between Leeds and Manchester, and improved road links in the North Pennines.

• The Chancellor announced a 0.5% rise in insurance premium tax, with the moneybeing spent on funding flood defences. Unveiling the measure in the Budget, he announced new projects to protect five areas in Cumbria and Yorkshire.