Chancellor George Osborne delivered the 2016 Budget in Parliament on 16 March.
"Today I delivered a Budget that puts the next generation first and redoubles our efforts to make Britain fit for the future by:
Cutting taxes so working people can keep more of the money they earn
From April next year the tax free personal allowance will rise to £11,500, a tax cut for 31 million people that means a typical basic rate taxpayer will be paying over £1,000 less income tax then when we came into government. The higher rate threshold will also increase to £45,000, a tax cut of over £400.
Freezing fuel duty to support household budgets and small firms
We have frozen fuel duty for the sixth year in a row, a saving of £75 a year to the average driver and £270 a year to a small business with a van. We’re also freezing beer and cider duty to back British pubs.
Improving our schools so our children get the best start in life
We’re providing extra money so every school in England becomes an academy and we are going to put a new sugar levy on the soft drinks industry so they reduce the sugar content of their products to tackle childhood obesity. The money raised will be used to double sports funding in primary schools and fund longer school days in secondary schools that offer their pupils a wider range of activities, including extra sport.
Introducing a new Lifetime ISA to help the next generation to save
We know people like the simplicity of ISAs so we’re going to increase the ISA limit from just over £15,000 to £20,000 for everyone. For those under 40, many of whom haven’t had such a good deal from pensions, we’re going to introduce a completely new Lifetime ISA. You won’t have to choose between saving for your first home, or saving for your retirement – the government is going to give you money to do both. For every £4 saved, the Government will give you £1. So put in £4,000 each year and the government will give you £1,000 every year until you’re 50.
Cutting taxes for small businesses
600,000 small businesses will now pay no business rates at all, an annual saving of up to almost £6,000, and a further 250,000 small businesses will get a tax cut on their business rates bill. We have also cut Capital Gains Tax to boost enterprise and cut Corporation Tax to support investment and job creation."
Top Twenty Bullet Points
Sound public finances to deliver security:
- Keeping public spending under control
- Delivering stability in uncertain economic times
- Ensuring taxes are paid
- Helping working people save and making sure they keep more of the money they earn
- Cutting taxes for working people so they can keep more of the money they earn
- Freezing fuel duty to help household budgets and support small firms
- Introducing a new Lifetime ISA to help the next generation to save
- Reforms to improve schools and deliver real opportunity
- Improving our schools so our children get the best start in life
- A new sugar levy to encourage lower sugar levels in soft drinks
Lower taxes on business and enterprise to create jobs:
- Cutting taxes for small businesses
- Cutting Capital Gains Tax to boost enterprise
- Reforming Stamp Duty on commercial properties
- Simplifying and modernising businesses taxes
- Investment to build homes and infrastructure
- Speeding up our planning system to get Britain building
- Giving the green light to Crossrail 2
- Improving northern transport links
- Giving local communities real incentives to grow
- Continuing the devolution revolution to return power to the regions
Budget announcements that will benefit people in the South West
Specific to the South West, the Chancellor announced:
- A new Mayoral Devolution Deal worth £900 million over 30 years which will see powers handed over for transport, planning and employment.
- £8.4 million to fill 159,000 potholes in the South West next year.
- £4.5 million boost for ultrafast broadband coverage across the South West.
- That the National Infrastructure Commission will use the South West as a case study to see how the UK can become a world-leader on 5G rollout.
Budget Resolutions and the Economic Situation
Robert Syms, Member of Parliament for Poole, spoke in the Commons debate on the Budget. Some highlights:
Budgets come and go, but what is important is the direction of the country over a period of years. When we came into office in 2010 in coalition, we inherited the largest peacetime deficit—nearly 11%. That required some tough measures and also some persistence, but fortunately the Government have been quite sensible. ... We now find that the budget deficit over the next year or two will be down to the levels it was at pre-crash, before 2007. ...
The British economy has performed tremendously well over the past six years at creating jobs. Compared with the rest of Europe or the rest of the world, we have ?done a fantastic job. That is because employers have been sensible and employees have been sensible, sometimes accepting the fact that they have to be more productive or accept lower pay rises, but it is also because the Government’s policies of ensuring a combination of welfare reform and pushing up the allowances—the rate at which people pay tax—have provided a big incentive for people to take employment.
There were two events on Wednesday: one was the Budget, but the other was the employment figures, which I want to focus on briefly. We have employment in Britain of 31.42 million—a record. That is a massive number of people, and it is up nearly half a million over the last year. We have real wages growing at 2.1%—above inflation—which means that living standards are slowly starting to recover, albeit perhaps not fast enough. In this Budget, the Government have again pushed up the allowances before people pay tax, but they also have proposals for a living wage, which should help to repair living standards, which we all want.
The number of people in private sector employment is 26.1 million—a record level. The claimant count has fallen in the last year—102,500. Even youth unemployment is down, while the number of those on unemployment benefit is down to its lowest since the 1970s, so there is a pretty good record on what is happening in the British economy. The Government have created a framework and they have the stability and a plan—a long-term economic plan. Employers have been able to invest, employees have taken sensible decisions, and we have got a lot of our citizens into work. ...
I was glad to note that the Government were assuming that, although the rate of growth would slow as productivity picked up, we would still end up with unemployment below 5% over the next two to three years. That constitutes a real success of economic policy, changing people’s life chances and giving them far more opportunities to make the best of their lives.