Last edited 03 Mar 2021

Budget 2014

Rebekah Paczek profile image.jpg

Rebekah Paczek from snapdragon consulting takes a wry look at the 2014 budget, and what it means for housing and construction.

First off, apparently the OBR says that the economy will soon be larger than it was when it collapsed. Which obviously has nothing to do with global economics and everything to do with George Osborne. On this basis Osborne clearly decided that he had some room for manoeuvre and announced not only a streamlined system of ISAs and an increased ISA allowance to £15,000 per year but, the headline grabber, is the complete overhaul of pensions, annuities and the removal of tax restrictions on access to pension pots.

As expected, the personal allowance increases to £10,500 and the threshold for the 40% tax rate goes up marginally to £42,835 from next year – could it be that in the Budget next year, just before a General Election, this threshold will be increased further??

Whether in a fit of generosity or in recognition that many charities are effectively performing the role that governments would usually fulfil, there was much in the Budget relating to grant giving to charities, Cathedrals and the Magna Carter trust – Osborne's speech writers must have been apoplectic with joy at the ability to draw comparisons between King John and Ed Miliband on fraternal betrayal.

For those concerned about house price inflation, whilst Help to Buy will be extended, the OBR will scrutinise the implementation. So no need to worry anymore on that count…

Whilst house building is increasing, it isn't enough – I think everyone knows that, but there is absolutely no consensus on how to deliver more housing. However, have no fear, the Government has come up with a series of measures to speed up and boost housebuilding:

And the rest...

The Government is keen to be seen to be supporting business, particularly exports and the role of UKTI. The government will increase the amount of lending for export to £3bn and will cut the interest on that by a third. This will be coupled with a reform of Air Passenger Duty making a more competitive and attractive system for investors and visitors.

All in all, a lot of conversation but a little less action on business and SMEs. We were hoping that there would be a surprise cut in Corporation Tax for SMEs, or just in general and an overhaul of business rates. In addition, the trailed abolition of employer national insurance contributions for employees aged 25 and under did not materialise, which is a shame. Obviously it would have meant that we would have to sack all of our employees on their 26th birthday – maybe that's why the government didn't introduce it after all…

Labour have yet to come up with credible policies. Some policy papers were published last week - if you blinked you would have missed them. They were light on substance so we can only hope that they are just an indicator of things to come and that they may get round to developing some actual policy quite soon so we can at least compare and contrast parties when it comes to the General Election in 2015.

19 March 2014.

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