Budget 2013: The Key Points You Need To Know
One of the directors at Brighton Homes letting agent scrutinises the budget and explains it in a simple way. George Osborne's Budget lasted 54 minutes and contained a raft of measures as well as data about the state of the economy. Here is a handy guide without the lengthy jargon.
The independent Office for Budget Responsibility predicts Britain will avoid a second quarter of negative growth and slipping into a triple-dip recession.
OBR forecasts put growth for this year at 0.6%, down a massive 50% on its previous forecast of 1.2%.
Growth forecasts for the coming years are now: 2014 - 1.8%, 2015 - 2.3%, 2016 - 2.7% and 2017 - 2.8%.
The deficit has been cut by a third from 11.2% of GDP in 2009/10 to 7.4% this year. It is forecast to drop to 2.2% by 2017/18.
Borrowing forecast to hit £114bn this year instead of £108bn, then £108bn in 2014, £97bn in 2014/15, then £87bn, £61bn and £42bn in the following years.
Proportion of national income spent by the state has fallen to 43.6%.
Public sector net debt is due to be 75.9% of GDP this year, then 79.2%, 82.6%, 85.1%, 85.6% in following years falling to 84.8% in 2017/18.
The Bank of England's Monetary Policy Committee keeps 2% inflation target but has its remit overhauled.
CUTS AND SPENDING
Whitehall departmental budgets cut by 1% after £11bn underspend this year.
Bigger savings of £11.5bn sought in the spending review for 2015/16, up from £10bn.
Public sector pay cap of 1% extended by a year in 2015/16. Military will receive full recommended increase and be exempt from changes to profession pay. New limit on "annually managed expenditure", which includes welfare budget, debt interest and payments to the EU.
Deal on the European budget secured by David Cameron saved Britain £3.5bn.
Infrastructure plans given and annual £3bn boost from 2015/16 - a total of £15bn over the next decade.
Plans to take forward two major carbon capture and storage projects.
"Generous" new tax regime to promote early investment in shale gas and tax incentives for the manufacture of ultra low emission vehicles.
TAX AND WELFARE
Corporation tax cut another 1% to 20% in April 2015 and small company and main rates of corporation tax merged at 20p.
Corporation tax cut paid by rise in bank levy rate to 0.142% next year.
Help for employees with more generous shareholder status, Capital Gains Tax relief for sales of business to workers and doubling tax free loans for commuter season tickets to £10,000.
Large new package of measures targeting tax avoidance and evasion to bring in £3bn in unpaid taxes.
New Employment Allowance from April 2014 taking off first £2,000 from employer National Insurance bills. Means around 450,000 small businesses will pay no employer NI at all.
Rise in personal allowance brought forward to 2014, meaning no income tax will be paid on the first £10,000 of earnings.
Extension to the Capital Gains Tax holiday.
Tax-free child care vouchers worth £1,200 per child and increased support for families with children on universal credit.
New Help-to-Buy scheme for people struggling to build up a deposit to buy a house, worth £130bn in loans.
Includes £3.5bn for shared equity loans and Government interest-free loan worth 20% of the value of a new build house.
PENSIONS AND SOCIAL CARE
Flat rate pension of £144-a-week brought forward to 2016.
Cap on social care introduced in 2017 and set at £72,000. Threshold for means-testing of help raised from £23,000 to £118,000.
Help for Equitable Life Policy holders extended to those who bought with-profits annuities before 1992, with payments of £5,000 and extra £5,000 for those on lowest incomes.
FUEL AND BEER
Planned rise in fuel duty this autumn is cancelled.
Planned 3p rise in beer duty tax scrapped and replaced by a 1p cut on a pint of beer.
Beer duty escalator axed. Planned rises for other alcohol duties is retained.
Nigel Pragnell, director at Brighton Homes commented that the new help to buy scheme is most welcome, but this doesn’t help the current issue, which is shortage of properties for sale at the right price. The chancellor has in fact increased the number of people who can now afford to buy, but the stock levels are still the same, which means the prices are going to go up as more people will be fighting for the same property. The government should give powers for the local authority to release more land and also stream line planning permission which will start the housing market moving and also creates more jobs and business should benefit, so should the economy.
Brighton Homes is the fastest growing letting agent in Brighton not only we let and manage properties for landlords we also have a dedicated property finder service to cater for landlords who want to invest more and it would have been nice for the chancellor to do something to help these folks as they are making more properties available for rent which is a great help to help people who can’t get on the property ladder. More supply of rental properties will stabilise the rents and make it more affordable for tenants.