Budget 2014 - Comment and summary
In response to the Budget CHC Chief Executive Nick Bennett said:
'On the same day as the Chancellor’s Budget announcement, we also discovered that unemployment in Wales is now lower than rest of UK. We believe that Welsh Government’s additional investment in social housing may be a contributory factor. We know from Wales Economic Research Unit (WERU) findings that additional investment in housing has not only boosted the Welsh economy to the tune of £840m, but that for every one job directly provided by the sector, a further two jobs are supported in the economy.
Today’s budget sees the UK Government commit to a new affordable house building target of 200,000 new homes with £0.5bn to support this. It’s estimated that Welsh Government will benefit from an extra £36m in spending over the next two years as a result of the budget. With Welsh Government setting a new target of 10,000 affordable homes, we’ll continue to call on them to invest any additional treasury consequential in social housing in order to meet housing need and ensure a sustainable recovery.
We are, however, disappointed that the UK Government have set a permanent spending cap on welfare at £119bn. The cap will rise in line with inflation, which is essentially a cut every year. This doesn’t help those people already struggling as a result of welfare reform.'
In summary, Budget 2014 will:
- Reduce taxes by increasing the level of the personal allowance again to £10,500 from April 2015 – meaning that this government’s increases to the personal allowance will then be worth £805 to a typical basic rate taxpayer, and over 3.2 million low earners will have been taken out of income tax altogether
- Introduce the most fundamental reform to the way people access their pensions in almost a century by abolishing the effective requirement to buy an annuity, giving people much greater freedom over how they access their pension savings
- Support households to save through a package of measures for people at every stage of their lives, including introducing a New ISA (NISA) for cash and stocks and shares with a significantly raised annual limit of £15,000, abolishing the 10% savings tax rate and extending the 0% band to £5,000, and issuing new National Savings and Investments pensioner bonds
- Cut beer duty to take 1 penny off a pint, freeze duty on most cider, and abolish the above-inflation duty escalator for wine to support community pubs; and freeze duty on spirits to support the whisky industry
- Reduce bingo duty to 10% and raise duty on fixed odds betting terminals to 25%
- Tackle tax avoidance by requiring users of disclosed tax avoidance schemes and schemes covered by the General Anti-Abuse Rule to pay the tax in dispute upfront
- Introduce further tax charges to discourage people from using corporate envelopes to invest in housing, and leaving it empty or under-used while not paying tax
- The welfare cap will apply to all welfare spending in AME, with the exception of the state pension and the automatic stabilizers
Housing and planning (England)
- The government will extend Help to Buy to 2020
- To support SME access to finance, the government will create a £500 million Builders Finance Fund
- The government will establish a £150 million fund to kick start the regeneration of large housing estates through repayable loans, helping to boost housing supply
- The government will support a new Garden City at Ebbsfleet
- The government will review the General Permitted Development Order
- Personal allowance will be increased to £10,500 from April 2015
- This will be worth £100 to a typical basic or higher rate taxpayer (£62 in real terms), and will lead to a further 288,000 individuals no longer paying income tax
- The adult NMW rate will increase by 3% to £6.50 from October 2014
- There will also be increases of 2% for the youth and apprentice NMW rates from October 2014
- Based on current plans, Universal Credit will be fully available in each part of Great Britain during 2016
- The government will shortly be publishing its proposals for a new fuel poverty target and strategy and as part of this will consider the particular challenges faced by those households that are not connected to the gas grid
The Wales Bill will be announced tomorrow, and early borrowing powers will go ahead.
You can access all the Budget documents here, and you can follow the conversation on Twitter by following the #Budget2014 stream.