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.
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:
- The most eye catching of which is that on 'Development Benefits' - the government will fund and launch a pilot to look at passing a share of the benefits of development directly to individual households. I can't wait to see the details of that one – Who is deemed as affected, does it cover landlords and tenants? How long do you have to have lived somewhere to claim benefits? It is clearly a marvellous incentive to oppose development as it begins to enshrine the principle of compensation. However, I think the whole industry will agree that adding additional cost and bureaucracy to the development process will help on delivery…
- Help to Buy will be extended to March 2020 to help a further 120,000 households to buy new-build homes.
- An Urban Development Corporation will be established to deliver a new garden city at Ebbsfleet. Apparently the government are going to make Ebbsfleet happen this time – maybe they will roll back the clock and get Anneka Rice in fluorescent lycra to run through the area gathering bricks and cement. The Government clearly chose Ebbsfleet just so they could get in a joke about how under Labour it had been more 'Ebb' than 'Fleet'. The Government will also produce a Garden City Prospectus by Easter 2014 to set out how local authorities can develop their own, locally-led proposals for bringing forward new garden cities. This should not, under any circumstances, be confused with the Eco Towns prospectus…
- A review of the General Permitted Development Order looking at making it easier to convert warehousing and light industrial buildings to residential.
- A gain share deal with Greater Cambridge announced, providing £100 million over 5 years (2015-16 to 2019-20) to fund local infrastructure. This agreement could be worth up to £500 million over 15-20 years.
- The Property Unit will increase its work with local areas on better use of public sector assets, to link with Growth Deals and building on the Strategic Land and Property Review. The Review has also identified scope to release £5bn from government land and property. How this will come forward is not clear – surely the government will be keen to gift land for development in order to get Britain building and provide sufficient lower cost housing…
- £150million fund to kick start regeneration of social housing estates.
- £500 million Builders' Finance Fund which will support SME access to finance to unlock 15,000 housing units stalled due to access to finance issues.
- Right to build for custom builders with a right to a plot from councils with a £150 million repayable loan scheme established to provide up to 10,000 serviced plots – where these plots will be, how they will be allocated and what restrictions will be placed on them is all yet to be discovered.
- A Planning Court will be launched on 6 April 2014 to fast-track disputes, including big construction projects. The Court will be established this summer and will fast track planning appeals on major development and ensue that planning appeals are heard by Judges trained and practised in planning law. The government will also shortly publish the outcome of its Significant Infrastructure Planning Regime Review.
- Enterprise Zones will be subject to extended capital allowances and business rates discounts.
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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