Osbo Budget 2015 Summary

 

• Deficit forecast: 3.7% in 2015/16, 2.2% in 2016/17, 1.2% in 2017/18, 0.3% in 2018/19, SURPLUS 0.4% in 2019/20

• NHS: £8 billion more a year, on top of previous £2 billion commitment. £10 billion yearly real terms rise.

• Public sector pay: Pay rises frozen at 1% for four years.

• Tax avoidance: £750 million for HMRC to go after tax evaders.

• Non-doms: Abolishing permanent non-dom tax status.

• Banks: Bank levy reduced, new 8% surcharge on bank profits.

• Transport: Tax on new cars to go into new roads fund. Fuel duty remains frozen this year.

• Higher education: Student maintenance grants replaced with loans from 2016-17.

• Devolution: More devolved powers for Manchester. Devolution for Sheffield, Liverpool and Leeds. Oyster cards for the North.

• Housing: Mortgage tax relief for buy to let landlords restricted to basic rate.

• Inheritance tax: Threshold increased to £1 million in 2017.

• Business: Annual Investment Allowance for small and medium sized firms raised to £200,000.

• Corporation tax: Corporation tax cut to 19% by 2017 and 18% by 2020.

• Welfare: New youth obligation to earn or learn, no housing benefit for 18-21 year olds.

• Childcare: Free childcare for 3/4 year olds of up to 30 hours a week.

• Disability: ESA for new claimants cut by £30 a week.

• Welfare: working age benefits frozen for four years.

• Housing: Rents in social housing to be cut by 1% a year for next four years.

• Tax credits: Threshold at which tax credits withdrawn down from £6420 to £3850

• Benefit cap: Cut to £23,000 in London and £20,000 elsewhere.

• Child tax credits: Limited to two children from 2017.

• Tax: Personal allowance raised to £11,000. Higher rate threshold raised to £43,000.

• Defence: spending to increase at least in line with inflation every year, commitment to 2% of GDP.

• Wages: Introducing new compulsory National Living Wage from next April, £9 an hour for over 25s by 2020.

Lots of interesting bits like the corporation tax reduction. Overall I like it. An Oyster Card for the North is small but a start for the Northern Powerhouse (The place battered by Heathrow expansion last week). More devolved powers to Manchester is good. Inheritance tax threshold increase is good. Taxing the dead on money they have already been taxed on is plain wrong. Big cut back on tax credits is good. Gordon Brown was a genius at creating dependency. Weening people off tax credits and onto a better wage has to be done. Defence spending to remain worryingly low but not go lower.

The cherry on the cake being the extra £10 billion a year on the NHS. That is £2 billion a year more than the election promise. It is massive. Required, but massive.

The mythical "surplus year" remains just about plausible in 2019/2020.