Live Budget 2013 coverage from 12.30 provided by Spear’s, followed by expert analysis and reaction here
Highlights: Borrowing up, growth down. Corporation tax down to 20 per cent from April 2015. New tax relief for investments in social enterprise. GAAR still coming in this year. Employment Allowance to take off £2,000 off employer National Insurance contributions.
Ed Miliband talks about ‘market sensitive fiscal forecasts’ being leaked to the Standard.
Huw Edwards on BBC now talking about Evening Standard splash. Editor Sarah Sands made overly mawkish apology (‘heartfelt’, ‘devastated’). Ed Miliband likely to say something on this; worth hanging around for.
Stop saying ‘aspiration nation’ – it’s like some nightmare phrase dreamed up by a Shoreditch consultancy.
‘Biggest tax cut in this Budget’: Employment Allowance takes up to £2,000 off employer National Insurance contributions. Available to charities too.
From 2014, income tax threshold goes up to £10,000 a year ahead of schedule – £700 less in tax since 2010. Three million people to pay no income tax at all – except, through National Insurance, they do.
So not only is there going to be no minimum price per unit of alcohol, but the beer duty escalator is being scrapped, including this year’s duty increase, and one penny is being taken off a pint. Government’s campaign against boozing going well then.
Kamal Ahmed on how George Osborne is about to spark a new housing bubble (on top of our current bubble
Help for people to buy houses: £3.5bn capital spending on shared equity loans up to 20% of value of new-build home for first-time buyers and existing homeowners.
Families who want a mortgage but can’t afford a deposit: mortgage guarantee for lenders.
Tax justice campaigner Richard Murphy on new Crown Dependency tax agreements:
Tax avoidance and evasion measures: Guernsey, Isle of Man and Jersey agreements to bring in £1 billion. General Anti-Avoidance Rule to be introduced this year (as planned).
For those who enable ‘aggressive’ tax avoiders: ‘This government is not going to let you get away with it.’
Headline corporation tax rate going down: from 28 per cent inherited from Labour to 20 per cent from April 2015.
Sophie on corporation tax: ‘Reducing corporate tax to 20% will mean we have one of the lowest rates in the G8 countries. Research suggests that higher rates of corporate tax didn’t raise as much as hoped anyway, but some will argue that the cutting of red tape is equally important and this budget has included lots of business tax tweaks that may reduce tax but that at the same time make the tax system even more complicated/’
Asset management industry needs to be protected. Abolition of stamp duty on shares traded on growth markets – getting rid of a financial transaction tax.
UK moving up competitive corporate tax location ladder, but more needed.
SEED enterprise investment scheme to be boosted. CGT relief for businesses sold to employees.
New tax relief for private investing in social enterprise. Great news! Read why Spear’s is such a fan of social enterprise here.
Sophie on infrastructure: ‘It could be good news that the government has boosted infrastructure spending by £3bn, but not all infrastructure spending boosts growth — projects need to be chosen carefully to make a sustainable difference.’
£3bn in savings to be found for infrastructure. These savings are astonishing: every Budget produces new savings as yet uncovered. I suspect they’re actually holding members of the House of Lords upside down and shaking them until their wallets fall out.
LIBOR banking fines going to military charities – veterans’ issues and Christmas boxes: good cause and nifty PR stroke.
Sophie on the independent Office for Budget Responsibility: ‘The OBR as predicted has revised down growth forecasts. This has become an annual tradition— how long can they retain any forecasting credibility?’
Departmental budgets for 2015/16: schools and health ringfenced; £11.5bn savings needed (not £10bn as forecase, nor £2.5bn extra cut as trailed).
Nice tweet from Gaby Hinsliff on what the chancellor’s burbling on inflation and the MPC meant:
2 per cent inflation target kept for Monetary Policy Committee.
Paid-for tax cuts (when are they not?).
The chart below shows the line shifting to the right again, meaning it’ll be even longer before our annual borrowing is brought down.
OBR forecasts revised down – setting in global context of US flatlining. ‘Unexpectedly poor exports.’
So, the figures: Growth: 0.6% 2013/14; 1.8% 2014/15; 2.3% 2015/16; 2.7% 2016/17; 2.8% 2017/18. See our chart below for how much lower growth predictions are.
Osborne says doing the opposite of Labour: Idleness?
Sophie says: ‘Osborne is trying to deflect from his bad news by getting in an early big dig at Labour. Ed Balls looks angry.’
Osborne up. Lots of aspirations and righting wrongs. Deficit now cut by a third, 1.25 million new jobs created, interest rates at record lows (because of our terrible economy, no?). ‘I’m going to level with people…’ – Osborne adopting cool-school-teacher tone.
The Evening Standard has splashed the entire Budget, which is probably unwelcome to whoever leaked it to them. Borrowing up, growth down. Standard.
Important tie coverage from Sophie: ‘A quick tie analysis: everyone’s wearing their party colours, even Clegg who last year wore Labour red — except for Danny Alexander who’s blended blue and yellow and gone for a green tie. Significant?’
From Sophie, about PMQs: ‘Quick dismissal of Labour MP Cathy Jamieson’s question about tax cuts for millionaires. Cameron repeats his old argument that the top rate of tax is higher now than under Labour. He also insists that a lower top rate of tax raises more revenue.’
Sophie and I have been getting high tech over here: we have some very exciting Excel charts to bring you once the chancellor annouces his borrowing and growth predictions.
Over the past three Budgets, the line representing predicted borrowing has shifted slowly but surely to the right, putting back the date that borrowing decreases. I’ll be surprised if it doesn’t shift further right today with poor economic predictions.
You can read expert predictions for what’s going to be in the Budget here.
Welcome to the Spear’s Budget 2013 liveblog, with instant coverage from Josh Spero and reaction from Sophie McBain.
First, a summary of what has already been trailed for this year’s Budget (as penned by Ben Brogan this morning):
> There are a further £2.5bn of cuts coming from Whitehall Budgets (Telegraph). Significantly, the big beasts, including Theresa May will not face further cuts (Sun)
> The £10,000 personal tax allowance will be brought forward one year, arriving in 2014 (Guardian)
> Beer duty escalator abolished, removing prospective 6p per pint rise (Sun)
> Fuel Duty rise postponed (Independent)
> Armed forces to receive 1.5pc pay rise (Telegraph)
> Child Trust Funds to be convertible to ISAs (Mail)
> Housing market propped up through an extension of New Build and support for developers, part of £2.5bn of infrastructure spending (FT)
> Flat rate pension brought forward one year (Telegraph)
Check back here from noon on Wednesday 20 March 2013 for live coverage of George Obsorne’s Budget. Meanwhile, you can read expert predictions for what’s going to be in the Budget here.
You can also see our coverage of previous Budgets here.