Budget Reports
Budget Report July 2015
No one quite knew what to expect in the irst budget by a majority Conservative government for almost 20 years.
In his seventh Budget Statement as chancellor, George Osborne promised a ‘big budget for a country with big ambitions’.
As predicted there were details on how the government will fulil its pre-election goals of reducing welfare spending by £12 billion and changing the inheritance tax nil-rate band structure.
There were also some surprises such as the compulsory introduction of the national living wage from April 2016 and a reduction in corporation tax.
The Chancellor also gave an update on the wider economic picture using igures from the Ofice for Budget Responsibility (OBR). Growth for 2014 was 3% (up from the forecast of 2.6% in March) and is expected to be 2.4% in 2015 thanks to stronger private consumption and investment.
This is the second year in a row that the UK is forecast to have the strongest economic
growth of any major advanced economy.
The OBR predicts that a million more jobs will be created by the end of the Parliament.
The deicit is forecast to be 3.7% of GDP in 2015 and will fall by around 1% each year until 2019 when there will be a small budget surplus of 0.4%.
Despite the continued growth in the UK, Osborne warned that the ‘global economic risks are rising’, pinpointing slowing growth in the USA and China as examples.
The following report summarises the announcements made by Chancellor George Osborne during the Summer Budget on Wednesday 8 July 2015.
Budget Report March 2015
Chancellor George Osborne used his “nal Budget statement of this Parliament to announce that “Britain is walking tall again”.
There are many things to be positive about:
Economy
The economy grew 2.6% in 2014 – faster than any other advanced economy. The Office for Budget Responsibility (OBR) has revised up its 2015 growth forecast to 2.5% (up from 2.4% at the Autumn Statement in December 2014 and 2.3% a year ago).
Employment
Unemployment fell by 102,000 in the 3 months to January 2015 and the employment rate is 73.3% – the highest level since comparable records began in 1971. The OBR predicts that unemployment will fall from 5.7% at the end of 2014 to 5.3% this year.
Inflation
Falling world food and oil prices mean that that the OBR has revised down its inflation forecast to 0.2% for 2015. Osborne con”rmed that the consumer price index in#ation target remains at 2%.
National debt
The Chancellor plans to use funds from bank sales, lower interest charges on government gilts and a smaller welfare bill to pay down the national debt.
Against this backdrop, the Chancellor promised a Budget that “does more to back businesses and make work pay”. However, with a general election less than 2 months away, it is not certain how many of the new measures will make it into law before the dissolution of Parliament.
The following report summarises the announcements made by Chancellor George Osborne during the 2015 Budget on Wednesday 18 March 2015.
Autumn Statement 2014
The Chancellor George Osborne delivered his final Autumn Statement of this Parliament amid ongoing economic uncertainty. The key indicators paint an unclear picture.
The UK economy is now expected to grow faster in 2014 than any other developed economy including the Eurozone. But the pace of GDP growth slowed between the second and the third quarters of this year, from 0.9% to 0.7%.
Inlation crept up slightly to 1.3% in October 2014 but this was from a 5-year low of 1.2% in September. Employment continues to rise and unemployment continues to fall but pay growth is only just keeping pace with inlation.
There were 76,000 more new businesses launched in 2013 than in 2012, and the number of businesses that failed last year fell by 6% on the year before. But annual growth in business investment is almost 3.5% lower than expected for 2014.
Despite the uncertain economic backdrop, the oicial update from the Oice for Budget Responsibility ”OBR) was positive. GDP growth in 2014 is expected to be 0.3% higher than the prediction made at the 2014 Budget in March. The OBR expects 500,000 new jobs to have been created by the end of the year, almost double the amount forecast in March. And the deficit has fallen to 5% of GDP, half the figure in 2010.
The Chancellor urged caution in view of ” warning lights” flashing over the global economy but said the figures showed the long term economic plan is working and the UK is “on course to prosperity.”
The following report summarises the announcements made by Chancellor George Osborne during the 2014 Autumn Statement on Wednesday 3 December 2014.
Budget Report March 2014
The economic backdrop to Chancellor George Osborne’s fifth Budget statement was decidedly more positive than it was when he moved into Number 11 in 2010.
The economy grew by 1.8% in 2013, three times more than the Office for Budget Responsibility predicted at the Budget in March 2013. The OBR has now upgraded its growth forecast for 2014 to 2.7% and to 2.3% for 2015.
Employment grew by 105,000 in the quarter to January 2014, driven by a surge in selfemployment, and the unemployment rate is down to 7.2%.
But it isn’t all good news. Inflation fell to 1.9% in January this year but average pay grew by 1.4% in the three months to January.
Also, the value of exported goods fell by 1.1% in the three months to January 2014, hardly the sign of an export-led recovery. In February, the Chancellor himself admitted to business leaders in Hong Kong that “Britain is not exporting enough.”
George Osborne also told his audience in Hong Kong that the UK’s economic recovery was not yet secure or balanced. He said that his 2014 Budget would be “… a budget where we must confront our problems and deal with some hard truths.”
He also echoed this sentiment in his Budget speech, saying that he had “… never shied away from telling the British people about the difficult decisions we face.”
The following report summarises the announcements made by Chancellor George Osborne during the 2014 Budget on Wednesday 19 March 2014.
Autumn Statement 2013
Delivering the 2013 Autumn Statement, the Chancellor said the latest forecasts from the Office for Budget Responsibility proved that “Britain’s economic plan is working” but warned that the “job is not done.”
George Osborne stressed that:
• the deficit is down but it’s still too high
• growth is up but productivity is too low
• businesses are expanding but exports could be better; and
• disposable incomes are improving but households are still struggling with the cost of living.
It was the introduction to an Autumn Statement he said was designed to secure the economy for the long term. Britain, said the Chancellor, needs “a Government that lives within its means” if it is to be “a country that pays its way in the world.”
The headline business announcements were on rates. A 2% cap on next year’s increase in business rates was confirmed. The doubling of the Small Business Rate Relief, to 100% for qualifying businesses, was also extended by a year until April 2015.
For personal finances, the planned September 2014 fuel duty increase has been scrapped. Train fares will increase in January in line with inflation only – not by the usual inflation plus 1%.
And basic rate taxpayers will be able to transfer £1,000 of their personal allowance to a spouse or civil partner from April 2015.
The following report provides a concise summary of the announcements made in the 2013 Autumn Statement.
Autumn Statement 2012
As expected, the Office for Budget Responsibility (OBR) downgraded its forecast for growth for the year 2012. The OBR believes that the UK economy will shrink by 0.1 per cent in 2012, compared with its Budget 2012 forecast of 0.8 per cent growth. Against this challenging backdrop, the Chancellor’s 2012 Autumn Statement outlined a range of measures aimed at making the savings needed to protect the economy and invest in programmes for growth.
Significant announcements included the details of a new £1 billion state-backed Business Bank to improve access to finance for small businesses. There will be an increase in the personal income tax allowance to £9,440 from April 2013 and the main rate of corporation tax will be cut to 21 per cent from April 2014.
The planned January 2013 three pence rise in fuel duty has been scrapped and the annual pension contribution allowance will decrease from £50,000 to £40,000 in 2014.
Whitehall budgets will be cut by one per cent in 2013 and two per cent in 2014, generating an intended £5.5 billion for investment in infrastructure. However, HM Revenue & Customs will be given an extra £77 million to tackle tax avoidance and evasion by companies and wealthy individuals.
This report provides a concise summary of the announcements made in the Autumn Statement.