The chancellor has delivered his 2016 Budget. Here are six quick takeaways, as we delve into the documents.
Budget 2016 At a glance
If you’re a roads contractor and you’re not thinking about what the network looks like in 2050, you might be in trouble.
The chancellor didn’t mention it in the speech, but the government will trial driverless cars on the strategic road network by 2017.
Driverless cars, lest we forget, could entirely change the way cities operate. Exciting (or frightening, depending on your view) times.
In the Budget document, we read that government will also:
- Consult this summer on sweeping away regulatory barriers within this parliament to enable autonomous vehicles on England’s major roads.
- Establish a £15m ‘connected corridor’ from London to Dover to enable vehicles to communicate wirelessly with infrastructure and potentially other vehicles.
- Carry out trials of truck platooning on the strategic road network.
We are the builders
Chancellor paid particular tribute to NIC leader and former Labour transport minister Andrew Adonis.
High Speed 3 gets the green light. New money for four-lane M62. A tunnelled road from Manchester to Sheffield. Upgrades for the A66 and A69.
George Osborne said: “We’re making the Northern Powerhouse a reality and rebalancing our economy.”
Government will commission Crossrail 2. It could have been designed for Jeremy Corbyn, the chancellor says, as ”it is for all those who live in north London and are heading south”.
Proposing increases in flood defences. Not affordable within existing budgets so… government will increase standard rate of insurance premium rate and commit to flood defences (equates to a £700m boost).
That said, didn’t they cut flood defence budgets before? Go ahead for schemes in York, Leeds, Calder Valley, Carlisle and across Cumbria.
Community housing trusts will benefit from stamp duty hikes, the top rate of SDLT will rise by 1 per cent.
All primary and secondary schools under local authority control to become academies.
There will be a focus on northern schools where performances have “not been as good as we would like”.
Maths to be taught to all pupils until age 18.
Fair funding formula to be introduced. £500m to speed up its introduction. Get over 90 per cent of schools on to this formula by the end of this parliament.
The education secretary will tomorrow publish a white paper setting out ”further improvements we will make to the quality of education”.
Further Budget reading:
Catch up on CN’s Budget 2016 live blog, all the news as it happened
A list of Northern Powerhouse project start dates has been published
See all the latest industry reaction to the Budget
Chancellor’s new love for Scotland
Opening negotiations on a City Deal with Edinburgh. Praise for Ruth Davidson MP for her “powerful” lobbying. Tax cuts for oil and gas.
Does the chancellor suddenly love Scotland or is he positioning himself for, say, a role whereby having Scottish support and Scotland rejecting renewed calls for independence might help?
He described oil and gas as a “major employer in Scotland and the UK”, but warned about the fact that oil prices have continued to fall.
Cutting in half the supplementary charge on oil and gas from 20 per cent to 10 per cent and “effectively” abolishing petroleum revenue tax.
The cuts are backdated to January 2016.
Business rates boost / Corporation tax being cut
Business rates: the chancellor announced he was more than doubling rate relief.
The threshold for small businesses will rise from £6,000 to max of £15,000. The higher rate will rise from £18,000 to £51,000.
From April 2017, 600,000 SMEs will pay no business rates at all, says the chancellor; 250,000 will see their rates cut.
Business rates to fall in line with CPI, not RPI, from 2020.
What will the impact be for local authorities, who are set to take control of business rates?
Corporation tax: “All the evidence shows it’s one of the most unproductive taxes there is,” says the chancellor.
He announced that by April 2020 corporation tax will fall to 17 per cent, from 20 per cent.
GDP growth forecasts have been cut
Despite his valiant attempts to report that Britain was the fastest performing advanced economy in the world (assume this means Ireland’s, for example, isn’t ‘advanced’), George Osborne will have been disappointed to have to set his Budget in the context of cuts to GDP growth forecasts.
The GDP forecasts now stand as follows:
- 2015: 2.2% (was 2.4%)
- 2016: 2% (2.4%)
- 2017: 2.2% (2.5%)
- 2018: 2.1% (2.4%)
- 2019: 2.1% (2.3%)
- 2020: 2.1% (2.3%)