2013 Budget recap

 
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Monetary policy

  • Updated remit for MPC to which Sir Mervyn King and Mark Carney have both agreed.
  • Forward-guidance to influence expectations on interest rates - like Fed - forward planning.
  • “Unconventional monetary instruments” were discussed.
  • Reaffirm inflation target at two per cent.
  • The open letter will now be written to chancellor on the day minutes are published.

Debt, deficit and growth

  • Deficit forecast to be 7.4 per cent of GDP this year and 2.2 per cent by 2017-18 (all excluding Royal Mail).
  • £114bn projected borrowing. £97bn of borrowing in 2014/15, £87bn in 2015/16, £42bn in 2017/18 (without QE proceeds).
  • Debt as a share of GDP to increase from 75.9 per cent in 2012-13 to 85.1 per cent in 2015-16.
  • Infrastructure spending boosted by £3bn to see a total of £12bn more by 2020.
  • Growth forecast halved as growth projections are reduced to 0.6 per cent for this year, then 1.8 per cent for 2014. Later growth predictions unchanged thereafter. 2.3 per cent for 2015, 2.7 per cent for 2016, and 2.8 per cent for 2017.

Jobs

  • 600,000 more jobs expected this year than at same time last year.

Cuts

  • Departmental spending reduced by one per cent for most. Schools, health, local government and police protected.
  • 0.7 per cent on international aid protected.
  • Details on £11.5bn savings on 26 June.
  • £745bn spending for 2014/15
  • Public sector pay freeze extended.

Childcare

  • New tax free vouchers 20 per cent off first £6,000 for each child.

Pensions and care

  • Flat-rate introduction brought forward to 2016.
  • Cap on social care costs confirmed

Taxation

  • Personal allowance raised to £10,000 from 2014.
  • Corporation tax main rate down to 20 per cent by April 2015.
  • Employment allowance first £2,000 off NI per employee from April next year.
  • Increase bank levy to 0.142% from next year
  • Beer duty escalator scrapped.
  • Fuel duty increase from September cancelled

Energy

  • Two new carbon capture projects.
  • Shale gas field allowance, planning reform to follow.
  • Exempt industrial processes for some manufacturing from climate change levy.
  • New tax incentives for low emission vehicles.

Housing

  • "Help to Buy" scheme provide an equity loan worth up to 20 per cent of the value of new build home worth up to £600,000.
  • £130bn of mortgage support from 2014-17

Infrastructure

  • £3bn more investment.
  • Update on Top 40 projects outlined in 2011 with “large proportion” funded privately.
  • Plans in spring to ‘streamline’ judicial reviews on big projects.

Asset management

  • Abolish schedule 19 tax.

Business rates

  • R&D credit up to 10 per cent.
  • Seed scheme will extend CGT holiday.
  • Double money available for season tickets.

SMEs

  • Procurement from small firms to rise fivefold.
  • Abolish AIM stamp duty.
  • New controls on what regulators can charge.
  • More procurement vouchers.