Budget 2015.

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Budget 2015.

“Britain on the rise, this is the budget for Britain –the comeback country” was how the Chancellor George Osborne opened his announcement of the 2015 budget to the Commons. We have broken down the main points contained within this year’s budget:

The economy is expected to expand by 2.3 % over the next three years, then 2.4% in 2019. Inflation is due to fall by 0.2%. Deficit halved since 2010 as a share of national income. The level of borrowing is set to fall from £90.2bn in 2014-15, £75.3bn in 2015-6 and £39.4bn in 2016-17. Debt as a share of GDP is to fall from 80.4% in 2014 to 2014 to 80.2% in 2015-16 and is expected to fall every year afterwards. It has also been noted that an additional 30 billion pounds worth of savings is needed in the next parliament.

As for employment matters, unemployment is expected to fall from 5.7% to 5.3% by the end of 2015. The expected fall is to be below that forecasted by the OBR. Osborne says that 1,000 jobs are being created a day. When the coalition entered office, unemployment was at 8%, now it is at 5.7%. The minimum wage to rise to £8 by the end of the decade.

With regards taxation, there has been an increase in personal tax free allowance, which rises to £10,800 this year, and to £11,000 the next. This is a tax cut for 27 million people. Osborne states that he wants to raise tax free allowance to £12,500 in the near future.

The North Sea oil industry has fallen on tough times at the moment, the Chancellor exercised this budget to offer support for this industry in the shape of a series tax cuts to charges, tax allowance and revenue levies. Such cuts are to be worth £1.3 billion. The 40p tax rate climbs to £43,300 in 2017.

In terms of the finance sector, £9bn of Lloyds shares are to be sold off this year, and so are £13bn of Northern Rock and Bradford & Bingley mortgage assets, profits of which are to be put into the treasury coffers.

Osborne used this budget to establish his plans for a Northern Powerhouse. A comprehensive transport strategy is to be funded and created in order to help the establishment of this; business rate receipts are to be devolved to Manchester and eight enterprise zones across Britain are to be created.

Announced was a ‘help to buy’ ISA available for first time buyers.

This being the last budget of the coalition, Danny Alexander used the opportunity to present an ‘alternative’ budget from a Liberal Democrats point of view. Alexander said that his party has signed up to the Conservatives economic plan up to 2016, but differed when it came to 2016 onwards. This alternative budget was also a way of separating the Lib Dems from the Conservatives on the run-up to the election. Alexander said that the Lib Dems want more of the money raise to tackle the deficit to be raised through higher taxes, rather than through spending cuts. The party is also opposed to deeper reductions in the welfare budget.

 

 

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