A populist Budget packed with tax cuts, along with fuel and beer duty freezes, dominated Chancellor of the Exchequer George Osborne’s speech in Parliament today.
Advertisement
But the measures outlined came with a substantial sting in the tail, as Mr Osborne also announced an additional £3.5 billion of spending cuts over the next four years.
He said: “The element that really worries me is around business rates being cut”.
Chote said the chancellor had cut his planned limit on day-to-day departmental spending in 2019-20 by around 2 billion pounds (about 2.86 US dollars) and had made a further commitment to 2 billion pounds of new spending.
Britain’s economy was on track to grow by only two per cent this year, much slower than the 2.4 per cent forecast in November, and by 2.2 per cent in 2017, down from November’s 2.5 per cent estimate.
It was “disingenuous” of Mr Osborne to say that he had raised 1.3 million low paid workers out of tax when they were still hit by their national insurance bill, Mr Johnson said.
The forecast for borrowing this year was revised down from £73.5 billion to £72.2 billion and Mr Osborne forecasts a budget surplus of 10 billion by 2019/20.
The deteriorating growth prospects and lower-than- forecast tax revenues have limited his options, but he was able to announce an increase in the starting point for the higher 40 per cent rate of income tax to £45,000 a year.
The increase in the higher rate threshold would take more than 500,000 people out of the 40p band.
Mr Osborne stated that the tax system influences behaviour, but we will have to wait and see if his announcements have the effects he wants.
However Terry Scuoler, chief executive of manufacturers’ organisation the EEF, said: “If there was ever a time when industry wanted to be left alone in a Budget then this is it”.
The Treasury will also set new “rules to stop the complex structures that allow some multinationals to avoid paying any tax anywhere, or to deduct the same expenses in more than one country”, Osborne said.
“We were elected as a government for working people and we have delivered a Budget for working people”.
He reportedly promised a “level playing field” for large and small businesses, and promised to create a “modern tax code”.
Advertisement
Furthermore the slashing of capital gains tax rate and entrepreneur’s relief being extended at 10% to long term external investors who hold newly issued shares in unlisted companies from March 2016 for longer than three years further reinforces the growing appeal of small business investing.
