Chancellor announces measures to help first-time buyers to save for home
Chancellor George Osborne promised new powers for Manchester and UK regions and a new Help-to-buy ISA savings account but stopped short of delivering any major new investment in the construction sector in his final budget before the election.
The Chancellor promised very little new investment in infrastructure in his last budget of the current parliament. Of the measures which were announced Osborne confirmed plans for 20 new housing zones and the introduction of a help-to-buy ISA which would allow households to save for their first home.
According to Osborne, for every £200 you save for your deposit, the government would add £50 more. According to the Chancellor if individuals put in £12,000 the government would put in £3000. The funding strategy for the new measures will be ready for this autumn.
Osborne also promised to raise apprenticeship wages, funding for a London Land commission and confirmed speculation that he could commit to funding HS3.
Speaking about HS3 Osborne said: “Working across party lines we will publish a comprehensive transport strategy for the north.” The Chancellor also announced a new city deal for the combined West Yorkshire authority.
Osborne said: “We have reached provisional agreement for Manchester to keep 100% of the extra revenue from increased business rates as it grows.
Osborne also offered the same deal to Cambridge and other councils. “Our ambition for a full national recovery is not limited to a Northern powerhouse.”
The Chancellor announced a new city deal for the combined West Yorkshire authority, confirmed a new £60m energy research centre in Birmingham and that the new energy catapult will be based in the West Midlands. Osborne also announced a £7bn in transport in the South West. Importantly, Osborne indicated an increase for the apprentice rate, though he failed to put details to the plan in his speech.
Osborne announced plans to support firms looking to trade in China by doubling UKTI support for firms trading in the nation. The Chancellor also defended the government’s record on public spending saying that spending will fall to the same level that it was at the turn of the millenium, not as low as the 1930s as Labour had claimed.
The main theme of the Budget was the return to prosperity and the Chancellor pinned the majority of his Budget on the recovery in both living standards and the economy, stating that households were £900 better off annually than they were in 2010.
The Chancellor stated that national debt as a proportion of GDP is falling. The deficit is predicted to fall to 4% of GDP in 2015/16 then 2% and 0.6% in subsequent years. In 2018 19 Osborne states the government will run a budget surplus of 2% and comfortably meet fiscal mandate to run a surplus for first time in eighteen years.
Even though the national debt has been falling a year earlier than previously stated, the Chancellor still planned £30bn in cuts in the next parliament.
GDP growth higher at 2.5% and revised up to 2.3% and reaching 2.4% in 2019. “We are replacing the disasterous economic model we inherited.”
The Chancellor also announced an increase in national minimum wage, rising to £6.70, and on course for a wage which would be over £8 by 2020.
Osborne also promised to cut corporation tax to 20% and introduce far reaching reform of business rates. he said he would abolish class 2 national insurance contributions for the self-employed. Self Assessment tax returns will be abolished. Millions of individuals will manage their own tax accounts: “We believe people should be working for themselves not for the tax man.”
A consultation was also launched into the compulsory purchase regime “to improve the consenting and planning processes for applicants and claimants and support brownfield development”.
As trailed, Osborne said the government will enter formal talks with the £850m Swansea Bay Tidal Lagoon project about potential public backing for the scheme.