The Chancellor of the Exchequer, George Osborne, launched his 2015 Budget with the words: “Britain is walking tall again.” He went on to add that: “Britain is growing, creating jobs, and paying its way.”
– More people have jobs in Britain than ever before, living standards are higher and Britain can boast a long-term economic plan that it needs to stick to, according to the Organisation for Economic Cooperation and Development (OECD).
– Economic growth has been revised upwards to 2.5% from the 2.4% stated in his Autumn Statement and the economy has been forecast to grow by 2.3% in 2016 and to 2.4% by 2019.
– The national debt, as a percentage of GDP, was 80.4% in tax year 2014/15, but this is now forecast to fall to 80.2%, in 2015/16, 79.8% in 2016/17, 77.8% in 2017/18 74.8% in 2018/19 and to 71.6% in 2019/20. Therefore, the Chancellor has made good on his promise to reduce the national debt by the end of this current Government.
– However, Government borrowing that stood at £150bn in 2010, will fall to £90.2bn in 2014/15, which is £1bn less than forecast at the Autumn Statement. This will fall to £75.3bn in 2015/16, £39.4bn in 2016/17, and £12.8bn in 2017/18. In 2019/20 there will be a projected £7bn surplus.
– The Government still plans to make £30bn of cost savings, made up of £13bn from Government departments, £12bn cuts in the welfare budget and £5bn in savings from clamping down on tax avoidance measures across the board.
– Inflation has remained low and is predicted to sit at 0.2% this year, whilst the Government will retain the 2% target given to the Bank of England moving forward.
– The UK now has the highest rate of employment in its history, with those newly created jobs being 80% full-time and 80% being in highskilled areas. The Job Seeker’s Allowance claimant count has also fallen to its lowest level since 1975. The national minimum wage will be increased to £6.70 per hour and rise to over £8 by 2020.
– In relation to tax the Chancellor announced that the paper selfassessment tax return was to be abolished, with the information required by the Revenue automatically uploaded into new digital accounts.
– The basic rate income tax personal allowances rises to £10,800 in 2016 and then to £11,000 in 2017. The higher rate threshold will rise to £42,380 in 2016/17 and to £43,300 in 2017/18.
– He will also abolish Class 2 National Insurance (NI) payments for the selfemployed.
– NI payments will also be abolished for those businesses employing workers under the age of 21. And from next April, this will be extended to those employing a young apprentice.
– Corporation tax is to be reduced to 20% from this April.
– Provisional agreement has been reached for Greater Manchester to keep 100% of any additional local business rates they raise, with Cambridge and surrounding councils being offered the same deal.