Key highlights of the Chancellor’s March 2013 Budget Statement
Posted by Alastair Caithness on March 20, 2013
The Chancellor of the Exchequer, George Osborne, today made his statement on the UK Budget 2013, saying it was a “Budget for people aspiring to work hard and get on”.
The Office for Budget Responsibility has forecast growth for 2013 of 0.6%, a downgrade from 1.2% in December, but predicts the UK will avoid recession this year.
For 2014 predicted growth is 1.8%, increasing to 2.8% by 2017. Borrowing for this year has increased from the previous forecast of £108bn to £114bn but is expected to fall in subsequent years, with borrowing as a share of GDP excepted to fall from 7.4% in 2013-14 to 5% in 2015-16.
The Chancellor announced help for small firms, saying: “We’ll increase by fivefold the value of government procurement budgets spent through the Small Business Research Initiative.”
Other key announcements included:
- An increase in capital spending of £3bn a year from 2015-16, funded by reductions in current spending.
- A reduction in spending by government departments of £1.1bn in 2013-14 and £1.2bn in 2014, with budgets for schools and health ring-fenced.
- A limit on public sector pay awards of 1% in 2015-16, with exemptions for services personnel.
- Funding for military causes, including Combat Stress, from Libor banking fines.
- A reduction in the main rate of corporation tax to 20%.
- A £2,000 a year employment allowance for National Insurance contributions for businesses and charities from April 2014.
- £5.4bn funding for housing through the launch of Help to Buy, seeing the extension for shared equity schemes and bank guarantees for £130bn of new mortgage lending for three years from 2014.
- £1.6bn for an industrial strategy which will include work with industry to create an Aerospace Technology Institute.
- The creation of a Single Local Growth Fund, as recommended in the Heseltine review.
- Tax incentives for ultra-low emission cars.
- Tax allowances for investment in shale gas.
- Increasing the personal allowance on income tax to £10,000 in 2014-15.
- Cancellation of the planned September fuel duty increase.
- Cancellation of the beer duty escalator and a reduction of beer duty by a penny a pint from 25th March 2013.
- Introduction of a Tax-free Childcare scheme up to £6,000 per child from 2015.
- Introduction of a single-tier State Pension and confirmation of the £72,000 cap on social care costs from April 2016.
- A crackdown on tax avoidance and evasion, to raise over £4.6bn over the next five years.
- An updated remit for the Monetary Policy Committee and a review of the monetary policy framework.