Damian Hinds has welcomed the 2015 Budget as another step on the road to prosperity in East Hampshire. The Budget shows the strides that Britain has taken under this Government: it is growing faster than any other major advanced economy, there are 1.85 million more people in work, and living standards are rising - families are an average of £900 better off in 2015 than in 2010. Moreover, debt is falling as a share of national income, and the deficit will be down to half the level it was in 2010.
The Budget also sets out what a future Conservative Government would do in the next Parliament, through new measures which support savers, create a fairer tax system, promote science and innovation, back business, and help charities and the armed forces.
For individuals and families, the Budget’s tax changes are allowing them to keep more of their hard earned cash. Freezes to fuel duty will help with the cost of filling up cars and the personal tax free allowance will be raised to £10,800 next year. 3.7 million of the lowest paid will be taken out of tax altogether.
A key support for savers which will be introduced is the new ‘Help to Buy’ ISA scheme. For every £200 a first-time buyer saves, the Government will top up the deposit with £50. This bonus is available up to £15,000 – so if a first-time buyer saves £12,000, the Government will add £3,000 to the pot. This will have a significant impact in East Hampshire, where average house prices are more than 11 times median earnings – over 60% higher than the average ratio for the UK.
On the subject of housing, the Budget also revealed that the Whitehill and Bordon development has been designated as one of the UK’s 20 Housing Zones, meaning the area will benefit from a share of up to £200 million recoverable investment from the government, cheaper borrowing and priority access to expert planning and technical support.
Another important measure to help savers is a new Personal Savings Allowance: from next year, our new tax-free allowance will remove tax on interest on the first £1,000 of savings for basic-rate taxpayers, or £500 for higher rate taxpayers. In the South East, this could remove up to 2.2 million people from savings tax liability.
Turning to the local economy, the budget included some key measures to support businesses. For the third year in a row beer duty has been cut – a small but welcome step for local pubs in a challenging trading environment. The Treasury also confirmed a radical review of business rates – paving the way for changes to how businesses across England pay the tax. Finally, for our local farming community, the period over which profits can be averaged for income tax purposes has been extended – from 2 to 5 years. The average farmer is expected to gain just under £1,000 a year from this change.
Lastly, the Government revealed pledges to support a number of good causes, with commitments to treble the £15 million Church Roof Fund, increase how much charities can claim in automatic gift-aid on donations to £8,000, and introduce ‘pensions for life’ for widows, widowers and civil partners of police or firefighters.
Damian said:
“This Budget consolidates the advances the UK has already made, and offers exciting plans for progress in the next few years. I am particularly pleased with the introduction of the Help to Buy ISA scheme, which will be very valuable for first-time buyers in East Hampshire who are struggling to save for a deposit and get onto the housing ladder.”
“I have great respect for farmers in East Hampshire, who work in an industry where profits can be uncertain and circumstances volatile. The Government is recognising the need to support and protect farmers by extending the period over which self-employed farmers average their profits for income tax purposes from two to five years.”
“I’m glad that the annual tax return is being abolished, making the tax system much more simple. Millions of people will have their information automatically uploaded into new digital tax accounts.”
“This Budget offers help for everyone, through universal measures such as the Personal Savings Allowance, and yet also specifically helps particular groups of people, such as those hoping to buy, and specific sectors, such as farming - demonstrating the Government’s commitment to supporting all in this national and yet individual plan for recovery and prosperity.”
Notes to Editors
We have met the debt target we set out in our first Budget: debt falling as a share of national income in 2015/16. Thanks to the hard work and sacrifice of the British people, we will end this Parliament with Britain’s national debt share falling.
Borrowing has been revised down. The deficit will halve to 5% this year, then fall to 4% in 15/16, then 2%, then 0.6% – lower than forecast in December. We will run a surplus of 0.3% in 19/20, or £7 billion.
Growth has been revised up. Despite weaker world and European growth, the OBR have revised up our growth forecasts. The UK will grow 2.5% this year (up from 2.4% at the Autumn Statement).This growth is broad based: business investment has grown four times faster than household consumption, manufacturing output has grown more than 4.5 times faster than it did in the entire decade before the crisis and, over the last year the North has grown faster than the South.
Living standards are now higher than when we came to office. The OBR forecasts living standards (real household disposable income) will be higher in 2015 than in 2010 by an average £900 per family, and grow strongly every year for the rest of the decade.
Employment is at a record high - 1,000 more jobs have been created ever day under this government. Employment is at its highest rate since records began, with the claimant count rate at its lowest since 1975.
A new Personal Savings Allowance to abolish taxes for 17 million savers. From next year our new tax-free allowance for the first £1,000 of the interest basic rate taxpayers earn on savings will be completely tax free – taking around 95 per cent out of savings taxation altogether. The allowance is £500 for higher rate taxpayers.
Help to Buy ISA to help people save for their first deposit. This new ISA will mean for every £200 a first time buyer saves, the government will give a bonus of £50 – up to £3,000. If you save up to £12,000 for the deposit on your first home, then you will get up to £3,000. For a basic rate taxpayer it’s the equivalent of not paying any income tax on £15,000 savings towards a first home.
A new Flexible ISA to encourage saving by trusting people with their hard-earned money. From the autumn, people will have complete freedom to take money out of an ISA and put it back in later in the year without losing their tax-free entitlement.
More freedom for pensioners over their savings. Extending new pension freedoms to the 5 million pensioners who already have an annuity – meaning pensioners will be able to sell their annuity income in return for a lump sum.
Raise the personal tax-free allowance to £10,800 next year and £11,000 the year after, with the benefit passed on to higher rate taxpayers. It means the typical working taxpayer will be over £900 a year better off, 3.7 million of the lowest paid will be taken out of tax altogether and 27 million people will benefit. We will also raise the 40p tax rate to £43,300 in 2017/18.
Freezing fuel duty to help families and small businesses with the cost of filling up a car. Cancelled Labour’s planned September increase – delivering the longest duty freeze in 20 years. It saves a typical family around £10 when they fill up.
Supporting our creative industries. Making TV and film tax credits more generous, expanding support for video games and launching new tax credit for orchestras.
Ensuring future scientific success. New support for PhDs and research-based masters degrees, and £140 million for world class research across the UK into the infrastructure and cities of the future.
Digital infrastructure strategy. £600 million to clear new spectrum bands for further auction to improve mobile networks, providing funding for free Wi-Fi in public libraries and committing to the ambition of bringing ultrafast broadband of at least 100 Megabits per second to nearly all homes in the country.
A major review of business rates. Business rates have not kept pace with the needs of the modern economy, so we will review the structure of the system. The review will report back in time for Budget 2016.
Abolishing the annual tax return to make the tax system simpler. Millions of people will have their information automatically uploaded into new digital tax accounts. Those with the most complex tax affairs will be able to manage their account on-line. Businesses will feel they are paying a simple, single business tax with most having their information automatically received. We will abolish Class 2 National Insurances contributions for the self-employed – a massive simplification for five million people.
Supporting farmers by extending the averaging period. Extending the period over which self-employed farmers can average their profits for income tax purposes from 2 to 5 years. Over 29,000 farmers could benefit – with an average individual gain of £950 a year.
£75 million of LIBOR fines will be used to support charities. These include £10 million for air ambulances, £25 million to help veterans and £1 million to support the commemoration of Agincourt.
Supporting good causes. We will treble the £15 million Church Roof Fund, increase how much charities can claim in automatic gift-aid on donations to £8,000 and introduce 'pensions for life' for widows, widowers and civil partners of police or firefighters.
Reducing the Lifetime Allowance for pension tax relief to £1 million. Reducing the Lifetime Allowance by £250,000. Fewer than 4 per cent of pension savers currently approaching retirement will be affected, and we will index the Allowance with inflation from 2018.
Increasing the Bank Levy by £900 million.
Continuing to crack down on tax evasion and avoidance. Measures include: legislating for the new Common Reporting Standard and the Diverted Profits Tax; amending corporation tax rules to prevent contrived loss arrangements; no longer allowing businesses to take account of foreign branches when reclaiming VAT on overheads; cracking down on agencies and umbrella companies that exploit the tax system to reduce their own costs; and a review on the use of deeds of variation to avoid inheritance tax.