Leaving aside the facts that this Budget comes ahead of an EU Referendum in June and the Chancellor of the Exchequer, George Osborne, has designs on the Conservative leadership ahead of the next general election, what was of interest to the UK’s marine industry?
Andrew Harries, British Marine’s Senior External Relations Executive, sets out the highlights of Wednesday’s announcement.
While reporting that the UK economy is set to grow faster than any other major advanced economy and the Chancellor is on target to deliver the manifesto pledge of a budget surplus in 2019/20, Osborne made every effort to point out that this Budget comes against the backdrop of weakness and uncertainty in the global economy. The Office of Budget Responsibility revised UK growth down over the next four years and the Conservatives has missed one of their fiscal targets – reducing borrowing as a proportion of GDP.
The global economic uncertainty, particularly in China and emerging markets, meant that global trade was revised down which will impact on UK exports. In an effort to support UK businesses through these tough economic times, the Chancellor announced reforms to business taxes. Business Rates, which have long been an issue, especially for smaller businesses, were a key target. The Chancellor announced changes that will exempt 600,000 small businesses from business rates. And from 2020 the rating for business rates will move to CPI (consumer price index), which will see further reductions in business rate bills.
The Chancellor continued to raise the threshold on income tax, increasing the personal allowance to £11,500 in April next year. At the same time he raised the threshold on the higher rate of tax to £45,000. Alongside this he announced plans to abolish Class 2 national insurance contributions by 2018.
Something that British Marine has been looking to gain more information on is the impact of flooding on the industry. Our work is ongoing on this, but we will be interested to know more about the Government’s plans for flood defences, where the Chancellor announced a 0.5% increase in insurance premium tax, with all the proceeds being spent on flood defences.
The Autumn Statement last November saw the Government set out details on the forthcoming Apprenticeship Levy. There was very little additional information on this, but there were a few announcements which are set to impact on education and the young. The Government set out plans for all schools to become academies, removing local authority involvement in education provision. Funds from the Libor fines will go towards doubling funding on sport in primary schools and increasing sport participation in secondary schools. There will also be £2.25m over the next 10 years to assist the Marine Society and Sea Cadets with replacing their dinghies.
Finally, the Chancellor continued the Government’s push to devolve more powers to the Nations and Regions. Part of this work will see a new Marine Hub Enterprise Zone being created in Cornwall. It was also see a number of science and innovation audits take place across the UK, to map regions’ research and innovation strengths and identify areas of potential global competitive advantage.
ou can read more about this year’s Budget on the Treasury website. British Marine will be monitoring all of those announcements that will potentially impact on the UK’s marine industry and feeding information back to its membership. The External Relations teamwill remain on hand to answer any queries from members.