I watched the Chancellor’s Budget speech, much disrupted by heckling from Labour Party Members of Parliament – generally a quite disgraceful performance uncontrolled by the Deputy Speaker.
Just a few key points worth mentioning:
Alcohol duty frozen and fuel duty frozen, which will reduce inflation by 0.2%.
There will be a new British Savings Bond for savers, and a new “UK” ISA into which an additional £5,000 can be saved in UK listed equities. Otherwise ISA allowances are unchanged. A consultation on the “UK ISA” is here: https://www.gov.uk/government/consultations/uk-isa-consultation
The Chancellor emphasised the need for “a more productive state, not a bigger one”. A public sector productivity plan will be developed to modernise IT systems. This could halve form filling by doctors in the NHS and improvements in the NHS App could reduce missed appointments. Comment: I don’t know about other parts of the NHS but those I deal with are awash with new IT systems. I get daily reminders about appointments, reports on test results and doctors’ letters sent by text messages. But I would just wish they would use email instead!
But the Chancellor said this will be a model for all public services and all hospitals will use electronic patient records. There will be £6 billion in additional funding for the NHS.
Tobacco duty will be increased to encourage a move to vaping instead, but a tax on vapes will also be introduced.
There will be a reduction in capital gains tax on residential property from 28% to 24%.
The current Non-Dom tax regime will be abolished and replaced by a simpler system with a 4 year limit on eligibility. Result: a £2.7 billion benefit to the Chancellor.
National Insurance will be reduced by 2% as widely leaked in advance.
High Income Child Benefit Charge will be administered on a household rather than an individual basis by April 2026, subject to consultation. This will remove an anomaly where single earners can pay more tax than two earners.
Multiple Dwellings Relief will be abolished from June after showing no evidence of promoting investment in the private rented sector – raising £385 million a year – and the Furnished Holiday Lettings tax regime will be abolished from April 2025, raising £245 million a year while making it easier for local people to find a home in their community.
Comment: simplification of the tax regime is always to be welcomed.
The main response from Keir Starmer was that as tax thresholds are still frozen, total taxes will continue to rise which is a good point. But Labour supports the NI cuts and fuel duty freeze.
More details here: https://www.gov.uk/government/news/chancellor-delivers-lower-taxes-more-investment-and-better-public-services-in-budget-for-long-term-growth
Summary comment: this is a “steady as she goes” budget which is always welcome as continual changes in taxes are always counter-productive. But it is not a budget that is going to change the Tories popularity overnight.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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