Now the Conservatives are in power, Chancellor George Osborne announced an Emergency Budget to improve Britain’s finances. As always, Scenes of Reason decodes the Emergency Budget 2015 for y’all.
Big cuts are coming to the public sector. But reductions in tax for those with low and middle incomes might sweeten the deal.
As in the previous budget, Osborne started with the good news. Britain’s economy is growing faster than any other advanced economy in the world. In fact the growth for last year was 3% higher than the 2.4% estimated.
But. There’s always a “but”.
The Greece Crisis shows the importance of getting our affairs in order.
The Conservatives have announced further cuts to benefits and public services. This was to be expected; it’s what they said they would do. People expected that the cuts would be quick and brutal. But the big surprise of the day was that the cuts announced by Osborne will be brought into effect much more smoothly and over a longer period of time.
No more borrowing; the Chancellor pledges to run a budget surplus by 2020.
– £12 billion to be found in cuts to Welfare benefits. These cuts will be detailed in a document released tomorrow.
– Sorry Students; your Student Maintenance Grants are gone. You’ll have to get a loan from 2016/17. But there will be a consultation on freezing no repayment until you earn £21,000.
– The amount you can earn before you pay any tax, goes up to £11,000. The amount before you pay highest amount of tax goes up from £42,385 to £43,000 next year.
– Introduction of the National Living Wage of £7.20PH for those aged 25 and over. This will rise to £9PH by 2020.
– £8 billion will go to the NHS as promised in the Conservative manifesto.
– Nom-Doms beware. Permanent Non-Domicile status (where you pay less tax if you are registered as living abroad) will be abolished and you will no longer be able to inherit Non-Dom status. Osborne nicked this idea from Labour’s manifesto. Cheeky.
– More money will be given to HMRC to catch tax evaders and tackle tax evasion. Smart move genius.
– The Bank Levy (which taxes the debts of banks) will be replaced by a new 8% charge on bank profits. Is this an attempt to stop HSBC moving to Asia?
– Fuel Duty (tax on fuel) remains frozen. New bands for Vehicle Excise Duty (tax paid on vehicles on the roads) to be introduced; the money collected will go into making new roads. Neat.
– Create a “Northern Powerhouse”; Manchester will get control of the fire service, a land commission and employment programmes. Similar options will be discussed with other northern cities. Local authorities around the country will get the power to set Sunday trading hours in their area.
– Changes to inheritance tax means parents will able to pass on properties worth £1 million to their children without being taxed. Londoners rejoice.
– Companies pay Corporation Tax (a tax on their profits). The amount of tax they pay will drop from 20% to 19% in 2017. It will lower to 18% in 2018.
– Watch out BBC. They’ll be funding free TV licences for over-75s; a duty recently held by government.
– 18-21s will “earn or learn”. There will be no automatic entitlement for housing benefit, except for the vulnerable (who aren’t able to look after themselves due to factors including mental illness or physical disability). Benefits for those of working age will not rise for four years. The total benefits cap for unemployed families will be reduced to £23,000 in London and £20,000 for the rest of the country. Child Tax Credits limited to two children per household from 2017. These cuts to benefits did not go down well with the Opposition parties.
– 30 hours a week of free childcare for parents of 3-4 year olds.
– Rents for social housing reduced 1% a year for the next four years.
– You can sleep easy, Britain; there will be annual increases to the defence budget.
There were lots of boos from the Opposition parties when the benefits cuts were announced. Labour Deputy leader Harriet Harman claimed he was making life worse for working people. She also questioned his figures on economic growth. But she also said that the Labour party was prepared to look at sensible proposals and not just block everything the Tories come up with. Seems fair.
Do you agree with the cuts made by George Osborne in the Emergency Budget? Do you trust the Conservatives to sort out the economy?